IMPLEMENTATION REFORM ACTIVITIES IN THE MOFEC

1. INTRODUCTION

   For more or less five months we have been in the "Era Reformasi" which represents the culmination of several crisis which have happened to our beloved country. The public demands for total Reform of all sectors, especially those relating to the economy, politics and the law which in fact up to this time have not yet been clearly realised. It has to be understood by all parties, that in a situation such as the present, which is very difficult, not all demands can be met, but the most pressing priorities have to be seen, to fulfil the greatest needs of the community, for example the need for the nine basic commodities "sembako".

   The political upheaval which has happened recently has already put us into a situation which is surrounded with uncertainties. Damage to infrastructure as a result of mass rioting, disturbances and economic speculation, have already resulted in disruption to the food distribution network. The supply of the nine basic commodities is disrupted and the prices are increasingly difficult for the community to meet. This all tends to increase the problems of food instability which in fact had already arrived several months ago. On the basis of this explanation, a priority activity which falls to the Ministry of Forestry and Estate Crops, in the "Era Reformasi" is to help with increasing the national availability of food.

   Together with the above, since the crisis began in the middle of 1997, it appears that in a difficult situation such as this, small and medium businesses are clearly stronger and have great power to face the upheavel of the market. Because of this, the orientation of development which will be undertaken by the Ministry of Forestry and Estate Crops during the "Era Reformasi" will be "Resource based economic development" which supports small and medium and village industries in becoming the second force in national economic development. In this context, Presidential guidelines during the first meeting of the Reform Development Cabinet are very clear, that the quality, productivity and competitive strength of the communities' economy should be increased by giving a role to small and medium sized businesses and co-operatives. This development should all be in line with the Decision Decree of the People Consultative Assembly especially no. X/MPR/1998 concerning a national guidance: Reform Development to secure of the National life salvage, which are reflected in the importance of our part towards the small and poor communities.

   In the implementation, the development approach which will be adopted as the framework for promoting the economic capacity of the community will be "Community based development". This approach places the group as the smallest unit of business in the community economy. Following on from this these groups will become the beginnings for setting up co-operatives. Because of this all activities and development campaigns in the forestry and estate crops sector will be directed towards the creation of "Capacity building, empowerment and sustainability".

   Related to the approach which will be adopted in implementation of development of the forestry and estate crops sector, there are six core issues which have to be fulfilled, that is:

   1. it has to be clear who the intended beneficiaries are,
   2. technology which is used has to be locally specific so that it is appropriate with the social-cultural conditions,
   3. public accountability guaranteed, which is reflected in a stable system of supervision and responsibility.
   4. Transparent characteristic which will guarantee the confidence of the members of programmes, and communities will be honestly treated by implementers and the government in carrying out development,
   5. Giving attention and a role to small and medium scale businesses and co-operatives so that they can increase the quality, productivity and the competitive strength of the people's economy,and
   6. Following-up on several regulations and laws which are not consistent with the aspirations above and preparing regulations and laws which are needed.
2. IMPLEMENTATION OF REFORM IN THE MINISTRY OF FORESTS AND ESTATE CROPS

   We are at this moment in the limelight, watched and studied to see if we are able to pioneer and implement Reform which is demanded by the public. One matter which it is a relief to know is that we are given time to provide evidence of our capacity and credibility. For the moment, of the several demands which are loudly proclaimed by the students and leaders of Reform, some can already by accommodated and realised. So also the response which is indicated by the world abroad, both international institutions and other nations is positive enough. Therefore we have to be able to make the most of the momentum which must be fully appreciated. One matter which needs to be stressed, that is the sense of realising that we are currently in a condition of crisis which can spur us to overcome the crisis, through, amongst other ways, carrying out Reform.

   As a broad guideline, Reform steps in the Ministry of Forestry and Estate Crops which have already or are currently being implemented are as follows:

   1. Establishment of a Reform Team which is independent and represents a partner of the Ministry in the framework of implementing reforms in the forestry and estate crops sector.
   2. Drafting a Reform Agenda for the Development of the Forestry and Estate crops sector which is consistent with its divisions , with amongst others the following contents:
      1. Secretariat-General
         • Implementing a programme of work creation to help fight the problem of unemployment and at the same time increase the availability of food nationally.
         • Improve the organisation and working arrangements of the Ministry as on effort to clean up elements of Corruption, Collusion and nepotism.
         • Prepare an regulations draft about the transfer of tasks to the Provincial governments.
         • Improve several regulations and laws, amongst others the Basic Law No. 5 of 1967 about the core criteria for forestry, in order to bring them into line with the development conditions, and improve Government regulation No. 21 of 1970 and Government Regulation No. 7 of 1990, to give a greater role to small and medium sized businesses in the field of forest utilisation.
      2. Inspectorate-General
         Raise the level of inspection activities, especially to suppress and eliminate the practice of Corruption, Collusion and nepotism in the Ministry.
      3. Directorate-General of Forest Utilisation
         • Implement the agreement between Indonesia and the IMF para 50 concerning the Resource Rent Tax and the Timber Export Tax.
         • Implement the agreement between Indonesia and the IMF concerning auctioning/tendering for forest concessions (HPH) and fixing a Performance Bond.
         • Review the implementation of the aerial photography in the HPH areas which was co-ordinated by the Indonesian Forest Concession holders Association (APHI) and carried out as a monopoly by one consultant.
         • Extend the period for a Concession (HPH) from 20 years to 70 years.
         • Study and support the ownership of concessions (HPH) by Co-operatives and communities.
      4. Directorate-General of Reforestation and Land Rehabilitation
         • Empower communities so that they can actively function in forestry activities.
         • Increase the role of NGO's (LSM) or local community groups to empower the communities.
         • Review the accreditation for HIKKINDO (Indonesian Forestry Consultants Association), so that forestry consultants have the equal opportunities in obtaining forestry activities.
         • Facilitate the flow of Watershed Conservation Farm workers Credit and Silk Farm workers Credit so that it goes directly to the farmers.
      5. Directorate-General of Inventory and Land-use Planning
         • Fix the legal status and synchronisation of the Forest Land-use with the Provincial Spatial Plans (RTRWP) to give certainty and security to business in the forestry sector.
         • Repeat the system of managing and utilising forests and estates fairly and transparently. Especially relating to the distribution which has already been announced in the Press Release. First is to be published instructions which define limits for the area to be managed for HPH, HPHTI and Estates, so that limits are to be fixed for the maximum area for forest utilisation and estates as follows:

           No	Management Unit	Area in Hectares
           		Province	Indonesia
           1	HPH/HPHTI Non Pulp	100,000	400,000
           2	HPHTI Pulp	100,000	400,000
           3	Estates Non Sugar cane	20,000	100,000
           4	Sugar cane Estates	60,000	150,000

         • Place forestry maps, data and information on an Internet Homepage in order to improve transparency for important needs of all parties.
      6. Directorate-general of Forest protection and Nature Conservation

         Improve ability to guard against and suppress forest and land fires.

         • Improve ability to protect forests and forest products independently.
         • Improve the integration of communities in the field of nature tourism and breeding of flora and fauna.
      7. Directorate-General of Estate Crops
         • Cancel the requirements for an HO permit because they are already included in an Estate EIA.
         • Facilitate financing through lenient credit facilities which up to now have been impeded by banks.
         • Free all primary estate crops from Value added Tax.
         • Open up opportunities to establish co-operatives in areas of estates, which up to now has been inhibited by Presidential Decree.
         • Implement the agreement between Indonesia and the IMF, amongst others cancelling the export ban on CPO and freeing foreign investment in the area of Oil Palm estates.

   At this moment the Reform Agenda Book is still being improved to become Book 2 of the Forestry and Estate Crops Reform Agenda. Improvements which are effective in Book 2 use materials such as the following:

   1. Evaluation of the activities which have been included in the Reform Agenda Book for the period since June 1998.
   2. Study inputs from various parties from 1) private individuals and 14 private groups, 2) 9 contributions from staff/officials of the Ministry, 3) 4 inputs from Regional Forestry and Estate Crops Office (KANWIL)/Technical Operation Units (UPT).
   3. Study inputs from the results of KANWIL meeting of 20-21 August 1998.
   4. Developments which have happened during the last three months have to be anticipated to be included in the Reform agenda.
3. CLOSING REMARKS

   This era of Reform represents an opportunity for us all to wisely and with understanding to carry out introspection concerning all matters which we have implemented throughout the 32 years of the "New Order". We have to admit that not everything that has been done has been mistaken, there are many matters which are good and proper to be developed and followed up. However we have to admit also that many matters have to be changed and improved, so that the crisis conditions can soon be overcome and we can advance to the stage of continuing development.

   One matter which needs to be remembered is that the implementation of Reform activities will have good results if it is implemented with honesty and for real. Empowering the communities which is rooted in self reliance represents the key to sustainability which must be remembered in carrying out total Reform in all divisions.