Study: One third of Indonesia’s forestry products comes from illegal sources

Indonesia's forestry products

One third of wood from Indonesia’s forestry sector could come from illegal sources, warns a new report. Creative Commons: Josh Estey for AusAID, 2009

More than 30% of wood used by Indonesia’s industrial forestry sector likely comes from the unreported and illegal clearing of natural forest, new research has warned.

Indonesia has the world’s fastest rate of tropical deforestation.

Around 60,000 sq km of virgin forest was lost in the country between 2000 and 2012, partly to make way for palm oil plantations and farms.

Globally, deforestation is responsible for more than 10% of greenhouse gas emissions. It also undermines regional water security and threatens the livelihoods of more than one billion people worldwide.

In a study released last week, researchers compared the supply of wood, as reported by the Ministry of Forestry, with the volume of production reported by the industrial forestry sector.

It found the raw material used by these mills far exceeded the legal supply – to the tune of 20 million cubic metres.

That enough wood to fill more than 1.5 million logging trucks – all coming from illegal sources.

Instead of using sustainably harvested trees from plantations, the industry is instead wood from land clearance, often making way for new oil palm and pulp plantations.

Given the area reportedly planted in oil palm and pulp, the gap could easily be met by this “conversion timber”, say the researchers.

The study – produced by Forest Trends and the Anti Forest Mafia Coalition of Indonesian civil society groups – warned that if the pulp and paper industry built more mills, as currently planned, and operated existing mills at full capacity, the legal wood supply would have to double in order to meet demand.

At present, industry data shows that the sector is operating at less than 80% of capacity.

Operating at full capacity would mean the gap in legal supply could grow by at least 10 million cubic metres of wood.

If new pulp mills were built, this gap could jump to over 44 million cubic metres.

In addition to sustainability concerns, this gap will also have implications on government revenue, the report warns.

With at least 30% of supply coming from illegal means, Indonesia could be losing billion of dollars in uncollected taxes and royalties from the forest sector.

“Before any new mills are built, the sector needs to provide timely, independent, public reporting to confirm that sufficient legal supply from plantations exist,” Michael Jenkins, president and CEO of Forest Trends. “Ultimately, Indonesia’s forest sector cannot remain viable and attractive to investment if it cannot operate within the law—a risk that foreign investors are already starting to realize.”

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