Indonesia represents the third largest tropical rainforest in the world and is home to the world’s largest tropical peatlands and mangrove forests [1]. These forest ecosystems provide society with a wide range of important ecosystem services [2] and are central to the lives of about 48.8 million Indonesian people, who are dependent on forest resources for their survival [3].
Approximately 120.5 million hectares or 63% of Indonesia’s total land area is designated as State Forest Area. Most of Indonesia’s remaining land area is made up of non-forest areas or public lands, known as Other Use Areas (APL) [4]. In general, the forest estate areas are categorized into three different functions: production forest, protection forest and conservation forest. These functions are legal distinctions of forest land use and do not entirely reflect land cover conditions. The forest estate has areas with forest cover and without forest cover. Similarly, lands categorized as areas for other purposes (including for agriculture expansion) also can be both forested and non-forested [5]. Based on 2020 land cover data, 79.9% of Indonesia’s conservation forest areas; 81.7% of its protection forest areas; and 81.2% of its limited production forest areas are covered by forests. In permanent production forest areas, the forest cover is 63.6%, while in convertible production forest the figure is 50.2% [4].
Deforestation and forest degradation are of major concern to Indonesia [4]. For more than five decades, forest resources have been important in driving Indonesia’s economic development [2]. From 1966 to the late 1980s, Indonesia was the world’s biggest raw log exporter and the world’s largest plywood producer. Timber was the second biggest contributor to the Indonesian economy after oil and gas, during the years immediately following the decrease in the price of oil in 1982 [4]. However, it was not until the 1980s that researchers began to take notice of deforestation in the region [2].
Indonesia had the highest rate of annual primary natural forest loss in the tropics, reaching the greatest level of 3.51 million hectares annually between 1996 and 2000, during which time major forest fires occurred [2], [6]. Deforestation fell to 1.09 million hectares between 2014-2015, and 470 thousand hectares in 2018-2019. This decline was driven by a decrease in forest and land fires of up to 82%. In addition, over the last 10 years, about 3 million hectares of degraded land has been rehabilitated. The deforestation rate in the period 2019- 2020 decreased by 75% to 115 thousand hectares, which was the lowest rate since 1990. The net deforestation for the period 2021- 2022 was 113.5 thousand hectares, showing a modest decline from 115.5 thousand hectares recorded in the previous period (2020-2021) [4].
As tropical deforestation contributes significantly to global warming and atmospheric change [2], Indonesia’s tropical forests have an important role to play in tackling global climate change. During the period 2000- 2020, the average GHG emissions level in Indonesia from forests and peatlands stood at 499 MTon CO2e/year, with around 40% of the emissions coming from peat fires. Emissions from peatlands account for about 50% of total emissions in the Agriculture, Forestry and Other Land Use (AFOLU) sector, which mostly come from peatland fires and dry peatland decomposition. Between 2011 and 2019, the area of peatland in Indonesia decreased by about 1.5 million hectares, from 14.95 to 13.43 million hectares [4].
The drivers of deforestation and forest degradation in Indonesia include the increased exploitation of natural forests in concessions; the conversion of forest area for other development purposes, such as agriculture, mining, and estate crops; migration; illegal logging; unsustainable forest management; changes in forest use purposes; illegal land occupation; forest fires; and natural disasters [2], [4].
The oil palm sector is one of the main drivers of deforestation in Indonesia [6]. Indonesia and Malaysia dominate the world market in Crude Palm Oil (CPO) and contribute to approximately 80 percent of global palm oil trade. Oil palm produces 4 to 10 times more oil per hectare than any other edible oil crop. As such, the oil palm sector makes a significant contribution to the Indonesian economy [4], [6].
Forest and land fires in Indonesia have attracted global attention since the devastating fires in 1982/1983 and in 1997/1998. Significant forest and land fires occurred again in 2007, 2012, and 2015, causing transboundary haze pollution in the ASEAN region [4]. Forest fires are caused by uncontrolled burning, due to natural processes or due anthropogenic activities. According to Darwiati and Tuheteru (2010), in Indonesia, nearly 99% of forest and land fires were caused by human activities, whether intentional or not (negligence element). In Kalimantan Ecoregion, the largest forest fires occurred in 2015 with a total area burned of 957,725.17 Ha. In 2019, the area of forest and land burned was 465,620.00 Ha [7].
Key policies and governance approach
In recent years, the Government has taken several measures to improve forest governance and sustainable forest management in Indonesia. This includes (i) Government Regulation No.104/2015 on the changes of forest land use and function, which bans the conversion of forested land (productive production forest) in forest area for APL, except in the province where non-forested lands in the production forest are not available; (ii) Presidential Instruction No. 5/2019 on Termination of New Permit and Improvement of Primary Natural Forest and Peatland Governance, which terminates the issuance of new permits in primary forests and peatlands; (iii) Government Regulation No. 46/2016 on strategic environmental assessments (SEAs), which provide guidance on the integrated, comprehensive, spatially explicit land use planning at national and subnational level aiming at food, water, and energy security based on sound ecosystem management; and (iv) Presidential Instruction No. 3/2020 on Management of Forest and Land Fires, among many others [4], [8]. Additionally, policy reforms are also underway to expand social forestry in Indonesia to support community rights in forests from less than 1% (1.1 million ha) to over 10% (12.7 million ha) of the country’s forest resource [9].
The moratorium on the utilization of primary natural forest and peatlands, made permanent through Presidential Instruction No. 5 of 2019, is an extremely significant policy formulated by the Indonesian Government. To implement this policy, the Ministry of Environment and Forestry established an Indicative Map for the Termination of the Issuance of Business Licenses (PIPPIB). The map covers more than 66 million hectares of mostly primary forests and peatlands. Within the 66 million hectares, new concession licenses may no longer be awarded [6]. Further, in order to protect peatlands from oil palm plantation expansion, the government has issued a government regulation on peatland ecosystem management and protection. After almost three-year discussions, on September 19, 2018, a presidential instruction on ‘Oil Palm Licensing Review’ was signed into force by the President Joko Widodo [4].
Additionally, through Indonesia’s Long-Term Strategy for Low Carbon and Climate Resilience 2050 (LTS-LCCR), the Government envisages achieving the Forestry and Other Land Use Net Carbon Sink by 2030, referred to as FOLU Net Sink 2030. The National Strategy for FOLU Net Sink 2030 employs four main strategies, namely: (1) Avoiding deforestation: curbing on deforestation rates in order to achieve the FOLU Net Sink 2030 which limits planned deforestation up to 6.8 million hectares by 2030; (2) Conservation and sustainable forest management: reducing forest degradation driven by excessive logging and production forest encroachment, and extending protected forest area in both production forests and other use areas (APL); (3) Protection and restoration of peatlands; emissions from peatlands account for 50% of total emissions in the AFOLU sector, which mostly come from peatland fires and dry peatland decomposition; and (4) Sink enhancement: accelerating afforestation and reforestation of severely degraded land outside and inside forest areas as well as urban revegetation [4]. In this context, Indonesia has also entered full REDD+ implementation for some years, guided by the REDD+ National Strategy [10].
Successes and remaining challenges
According to the State of Indonesia’s Forests 2022 Report, Indonesia has made significant progress in improving the management of its forests. Achievements include: i). the reorientation of forest management from a wood-based to a sustainable forest ecosystem and community-based approach; ii). consideration of the principle of environmental carrying capacity in forest utilization schemes. The principle is internalized into the National Forestry Plan as a macro spatial plan for forestry development for the period 2011-2030; iii). prevention of biodiversity loss within and outside conservation areas, by preventing further damage to landscapes of the conservation area and by enriching species; iv). strengthened policies and the implementation of national development by incorporating economic and environmental balance. Economic development is necessary to support the national economic recovery that is able to create new job opportunities for communities; and v). affirmative policies on the community access to forest utilization, on local and regional dispute resolution, as well as on the local community rights and forest use related conflict resolution for customary communities. As a result of all these efforts combined, Indonesia has been able to significantly reduce deforestation in the period 2019-2021 [4].
Nevertheless, the country still faces challenges in the implementation of Indonesia’s FOLU Net Sink 2030. Such challenges include cross sectoral issues, for example, emissions reduction targets in the FOLU sector often conflict with targets related to biomass-based energy development, and food security that requires extensive land availability; institutional constraints, especially for implementers in the regions; the continuous need for intellectual support for the development of new policies and the discovery of methodologies; siloed government natural resource management policies and programs as a result of decentralization [4], [11]; and significant financial requirements for the implementation of FOLU Net Sink 2030, with the total financing required for mitigation actions towards a net sink by 2030 estimated at USD 16.5 billion [4].
Currently, most of the financing for mitigation actions is still borne by the state budget (APBN), which is far from sufficient. Further, private financing for mitigation actions in the forestry sector is rather limited and still dominated by commercial activities including the utilization of forest products [4]. According to a recent analysis, in the last several years, average annual private investment in forest-based value chains has exceeded USD 3 billion in Indonesia (investments by small and medium-sized enterprises are included in these estimates if they operated formally). Notably, annual investments in wood processing, pulp and paper and furniture are many times greater than those in forestry [9].
Initiatives and Development Plans
One of the Government’s measures to address sustainable forest management in Indonesia is social forestry programs, which are focused in areas that are prone to deforestation and where communities are forest dependent as designated in the Indicative Map for Social Forestry Areas (PIAPS). The programs are carried out through rehabilitation activities applying several techniques, such as agroforestry, continuous assistance, and institutional development of social forestry groups.
For conservation areas, there are 2 partnership schemes: conservation partnerships for community empowerment, and conservation partnerships for ecosystem restoration. Conservation partnerships for community empowerment provide local communities with access to conservation areas in the form of collecting Non-Timber Forest Products (NTFPs), utilizing traditional aquatic resources, traditional cultivation, and hunting for unprotected species. Those activities are carried out in traditional zones/ blocks. Meanwhile, conservation partnerships for ecosystem restoration are partnerships with community groups in rehabilitation areas/blocks that aim to restore conservation areas that have been degraded due to unsustainable uses. Conservation partnerships are carried out in several of Indonesia’s National Parks and other conservation areas. Since 2018, conservation partnerships covering an area of 232,975.04 hectares have been signed. They involved 508 community groups or a total of 17,823 people in 375 villages in 76 conservation areas under 58 technical management units (UPT) of the Ministry of Environment and Forestry [4].
The World Bank is supporting the government of Indonesia’s target to improve communities’ access to forest land use and strengthen community management in selected priority areas allocated for social forestry through the Strengthening of Social Forestry (SSF) Project, with US$ 14.3 million funding from the Global Environment Facility. This program facilitates legal access to and promotes the sustainable management of 300,000 hectares of forests by communities in 11 forest management units in six districts across West Sumatra, Lampung, West Nusa Tenggara, and North Maluku. By 2025, the program is expected to benefit approximately 150,000 beneficiaries (30% of whom are women), reduce 9.2 million tons of CO2 emissions, and enhance forest cover by rehabilitating degraded forests that are important for biodiversity conservation [12].
Indonesia was the first and is still the only country to have a fully EU FLEGT-compliant legality verification system. The country established the SVLK (Timber Legality Assurance System), guided by three main principles namely, good governance, representativeness, and credibility. The SVLK provides two forms of certification, Sustainable Production Forest Management Certification (S-PHPL) and Timber Legality Certification (SLK). As of December 2021, 5,302 management units or business entities had obtained PHPL certificates or SLK certificates. Recently, the SVLK was transformed and rebranded into the Forest Legality and Sustainability Assurance System. The brand, launched at COP 26 UNFCCC in 2021, strengthened Indonesia’s commitment to sustainability [4].
Indonesia has also signed a comprehensive economic agreement with the member states of the European Free Trade Association (Iceland, Liechtenstein, Norway and Switzerland). Under the agreement, which entered into force in November 2021, Swiss tariffs on palm-oil imports will be reduced by 20–40% if the palm oil complies with certain sustainability goals [9].
- Expand financial sources, both from national and international sources, as well as from the private sector and the general public. For instance, climate mitigation in the land-based sector can be financed by the State Budget (APBN), provincial/district/city Regional Budget (APBD), central and regional government partnerships, government and private partnerships, foreign/domestic grants, public-private partnerships, as well as other legal fund resources in accordance with laws and regulations. Blended finance including a market mechanism is also potential financing, as regulated in the Presidential Regulation on Carbon Pricing.
- Explore Payment for Ecosystem Services (PES). However, in identifying other funding sources, it is necessary to conduct a feasibility analysis regarding the potential for funding and the available funds that will be closely related to the potential for sustainability.
- Increase the capacity of financial institutions and relevant stakeholders to access funding.
- Indonesia should continue to mobilize international financial resources, optimizing bilateral, regional, and multilateral channels, including results-based payments for REDD+ under the Paris Agreement, grants, and other potential sources and mechanisms.
- Invest in nature-based solutions.
- Improve the conservation and rehabilitation of watersheds, critical lands, protected forests, and production forests.
- Continue to mobilize international support for capacity building under the Paris Agreement and forest-related conventions.
- Increase the role of endogenous technology and seek opportunities for technological cooperation within the framework of technology development and transfer, as a manifestation of the Paris Agreement.
- Ensure coherence of central and regional natural resource management policies.
- Strengthen research collaboration between domestic and national institutions and international partners.
- Cooperate with academia for the development of new science-based policies and the discovery of methodologies.
- Use more detailed map scales in fieldwork.
- Organize intensive fieldwork, taking into account the existence of stakeholders with their respective local wisdom, and the diversity Indonesia’s geographical area.
- Adopt spatial and remote sensing technologies as working instruments to support cooperation developed between relevant work units such as central and local governments, state and non-state actors, and to align perceptions between parties based on compatible methodologies.
[1] The World Bank Group (2022). The World Bank In Indonesia: Overview. [Online]. Available: https://www.worldbank.org/en/country/indonesia/overview.
[2] Nugroho, H.Y.S.H.; Nurfatriani, F.; Indrajaya, Y.; Yuwati, T.W.; Ekawati, S.; Salminah, M.; Gunawan, H.; Subarudi, S.; Sallata, M.K.; Allo, M.K.; et al. Mainstreaming Ecosystem Services from Indonesia’s Remaining Forests. Sustainability 2022, 14, 12124. https://doi.org/10.3390/su141912124.
[10] Republic of Indonesia (2022). ENHANCED NATIONALLY DETERMINED CONTRIBUTION REPUBLIC OF INDONESIA.
[11] Monica Evans, Forests News (2022). “This means it can be done”: Perspectives on the latest State of the World’s Forests report in the Indonesian context. [Online]. Available: https://forestsnews.cifor.org/78831/this-means-it-can-be-done-perspectives-on-the-latest-state-of-the-worlds-forests-report-in-the-indonesian-context?fnl=.
[12] The World Bank Group (2022). Opening the Door to Community Forest Access and Management in Indonesia. [Online]. Available: https://www.worldbank.org/en/news/feature/2021/10/21/opening-the-door-to-community-forest-access-and-management-in-indonesia.