Corruption in the Forestry Sector

Corruption in the Forestry SectorThe case of corruption in the forestry sector is no longer a new case. From the records of Mongabay Indonesia (07/11/2013), since the KPK was established, at the end of 2003 until August 2012 alone, there are at least seven cases of forest sector corruption that have been handled. Emerson Yuntho, Member of ICW Workers' Agency, said the Corruption Eradication Commission (KPK) has not been optimal in investigating forest sector corruption. Environmental law enforcement has not been much of a trap for key actors, such as pulp and pulp mill corporations.

During this time there are many versions that talk about the loss of state finances due to illegal practices in the forestry sector. Former Minister of Forestry, M.S. Kaban once said, state losses due to illegal logging practices in the forestry sector reached Rp. 30 trillion or about Rp. 2.5 trillion per month. While the EIA reported that losses due to illegal logging reached Rp. 40 trillion per year. These versions indicate, so strategically, the Forestry Sector is a priority for reforming or reforming the bureaucracy. The practice of corruption is also considered to have a significant share in causing ecological damage whose material losses can not be measured with certainty.

From the examination of Ministry of Environment and Forestry data, the KPK found that some of the production data recorded at the Ministry of Environment was much lower than the volume of timber harvested from natural forest in Indonesia.

The KPK study results also show that the total actual timber production, in the past 10 years, has reached 630.1 to 772.8 million cubic meters. Meanwhile, according to official statistics Ministry of Environment and Forestry, commercial timber production from natural forests in Indonesia for the last 10 years as a whole only reached 143.7 million cubic meters.

These figures indicate that the statistics from the Ministry of Environment and Forestry accounted for only 19-23% of total timber production during the study period, while 77-81% were not recorded. That is, the cost of forest maintenance is huge, but Non-Tax State Revenue (PNBP) from that sector is not well managed. The potential loss of state finances due to unearned Forest Resources (PSDH) and Reforestation Fund (DR) amounts to Rp 5.24-7.24 trillion per year.

In addition, the KPK also found a number of weaknesses in the administration system of Non-Tax State Revenue from the forestry sector, including weak data and information systems; internal control is inadequate to ensure timber accountability and PNBP collection; external accountability mechanisms are inadequate to prevent state losses; limited effectiveness of forest law enforcement; as well as royalty rates in the forestry sector are set at a level that facilitates the very limited economic rent taking by governments and provides an implicit incentive for unsustainable forest management.

Therefore, in addition to revamping the Forestry PNBP sector, in order to improve governance in the forestry sector, KPK needs to accelerate the process of inaugurating the forest area, through the Joint Regulation of the Minister of Home Affairs, the Minister of Forestry, the Minister of Public Works and the Head of the National Defense Agency Procedures for Settlement of Land Tenure within the Forest Estate. The government through the KPK also needs to encourage the expansion of community management areas through the acceleration of realization of social forestry and encourage public information disclosure and strengthening of anti-corruption instruments.

In essence, in the last decade, the potential of state revenue from the management of natural resources is not directly proportional to the realization in the field.

When natural resource-based businesses are not managed transparently and accountably, the state ends up being adversely affected by low revenues from the mining, marine and forestry sectors. Corruption in the Natural Resources sector is not only a matter of state financial losses, but also the problem of state failure in managing Natural Resources as stated in the 1945 Constitution. Therefore, improved forest governance should be on the Government's agenda by 2017 this. Is not one of the responsibilities of the state, as mandated by the constitution of article 33 paragraph (2), is the protection and control of the state over the earth, water and all the wealth contained therein for the greatest prosperity of the people?

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