VZCZCXRO4079
RR RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHJA #0778/01 1090511
ZNR UUUUU ZZH
R 180511Z APR 08 ZDK
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC 8733
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHKO/AMEMBASSY TOKYO 1844
RUEHBJ/AMEMBASSY BEIJING 4958
RUEHBY/AMEMBASSY CANBERRA 2357
RUEHUL/AMEMBASSY SEOUL 4537
RUEAIIA/CIA WASHDC

UNCLAS SECTION 01 OF 02 JAKARTA 000778 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR OES/ENRC, EAP/MTS, EAP/RSP 
USTR FOR MLINSCOTT, DBROOKS 
USAID FOR ANE, EGAT [CBARBER, MMELNICK] 
BANGKOK FOR RDM/A 
NSC FOR CEQ CONNAUGHTON, VAN DYKE 
USFS FOR CMACKIE 
TREASURY FOR KBERG 
 
E.O. 12958: N/A 
TAGS: SENV EAID KGHG ECON PGOV ID
SUBJECT: CAN'T SEE THE FOREST FOR THE TREES - INDONESIA'S ILLEGAL 
LOGGING CHALLENGE 
 
¶1. (SBU) Summary:  Recent actions by Indonesian authorities 
highlight the successes of Indonesia's campaign against illegal 
logging but also underscore the significant remaining challenges. 
The Government of Indonesia (GOI) has shown political will and 
improved interagency cooperation but has to do much more to improve 
forest governance, with international assistance.  The continued 
clearing of forests, including protected areas, has clear 
implications for the Heart of Borneo (HOB) Initiative and the 
eventual success or failure of Reducing Emissions from Deforestation 
and Degradation (REDD) programs in Indonesia.  End Summary. 
 
Enforcement Crackdown Reveals Scale of Problem 
--------------------------------------------- - 
¶2. (U) A recent crackdown in the port city of Ketapang in West 
Kalimantan Province highlights the scale and challenge of illegal 
logging.  In a joint operation with national forestry officials that 
began in mid-March, Indonesian National Police (INP) seized 19 
vessels carrying 12,000 illegally harvested logs worth over $23 
million.  The INP arrested at least 26 suspects and transferred 23 
of them to Jakarta for questioning.  The joint investigative team 
estimated from average observed daily volumes that the value of 
annual exports of illegal timber from the Ketapang region may have 
reached as much as 32 trillion rupiah (approximately $3.5 billion) 
-- equivalent to 26 times West Kalimantan's 2008 budget.  Last year 
between late October and early November, police seized 4000 logs 
worth over 1 billion rupiah (over $100,000) in Ketapang. 
 
¶3. (U) In addition, a joint police, military and forestry team 
seized 32,000 logs on February 7, as 57 motorboats and as many as 
800 persons were transporting the logs down the Kapuas River in West 
Kalimantan.  This followed seizures on the same river of 2,500 round 
logs and 2,500 planks from mid-late January.  Meanwhile, during 
January, police and forestry officials seized 5,274 mixed logs in 
Hulu Sungai Utara regency, South Kalimantan, and another 2,000 
meranti logs in Kabupaten Sintang, West Kalimantan.  Government 
authorities are frequently reporting similar -- if smaller-scale -- 
seizures and arrests in other parts of Indonesia. 
 
Interagency Cooperation Shows Recent Improvement 
--------------------------------------------- --- 
¶4. (SBU) This crackdown in West Kalimantan, and Ketapang in 
particular, point to improved cooperation between the INP and 
Ministry of Forestry (Dephut) -- between whom relations have been 
uncooperative if not hostile since mid-2007.  Both INP chief, 
General Sutanto, and Minister of Forestry M.S. Kaban, made a point 
of visiting Ketapang together in early April to assess the 
situation.  This apparent renewed effort at cooperation comes on the 
heels of a limited cabinet meeting on February 22 at Dephut to 
discuss illegal logging.  After the meeting, President Yudhoyono 
remarked that he was not satisfied with the results of the 
anti-illegal logging campaign that he initiated in 2005.  He called 
for an intensification of efforts and improved interagency 
cooperation and coordination. 
 
Corruption: A Clear Challenge 
----------------------------- 
¶5. (SBU) The recent crackdown underscored the continuing 
pervasiveness of official corruption and the need to improve 
governance at all levels.  Of the 26 suspects detained, the INP said 
seven were local and provincial police officers, and another six 
were local forestry officials.  These included the head of the 
Ketapang forestry office, and the Ketapang police chief.  One 
suspect told the INP he bribed various members of the local police, 
local military command, forestry officials, and marine security 
officials for each ship leaving Ketapang laden with timber.  One 
media report said the police investigation indicated these bribes 
were as high as $13,000 per ship. (Note: The frosty relations 
between the INP and Dephut since last year stemmed in part from 
police allegations of widespread corruption among forestry officials 
in Riau Province on Sumatra.  End Note). 
 
¶6. (SBU) A local forestry official in Pontianak, West Kalimantan, 
told the press that illegal logging surged again in Ketapang after a 
previous INP team left after conducting operations there in August 
¶2007.  Given the apparent widespread complicity of local police, the 
INP's General Supervision Inspectorate summoned the provincial 
 
JAKARTA 00000778  002.2 OF 002 
 
 
police chief, Brigadier-General Zainal Abidin Ishaq, to Jakarta for 
questioning on April 9.  Zainal is not a suspect, but on April 15 
General Sutanto issued orders relieving him of his command and 
reassigning him to INP headquarters in Jakarta. 
 
Widespread Logging And Encroachment Continue 
-------------------------------------------- 
¶7. (SBU) While these actions show that illegal logging is still 
widespread in West Kalimantan, NGOs and the Indonesian press report 
rampant and continued clearing of forests elsewhere, including in 
protected areas. (Note: A U.S. Forest Service team, traveling 
together with Dephut counterparts, observed signs of this during a 
February visit to West Kalimantan.  End Note).  For example, in 
Taman Nasional Kerinci Seblat (TNKS), the largest national park in 
Sumatra and straddling four provinces, park officials say there is 
evidence of illegal logging up to 4 kilometers within the park 
boundaries.  Furthermore, they point to plans to build as many as 33 
roads that would bisect the park in the four provinces.  In Aceh, 
despite a logging moratorium, local residents continue to clear 
forest to plant oil palm, either for themselves or on behalf of 
local companies. 
 
¶8. (U) In November 2007, the press reported continued forest 
clearing in Taman Nasional Kutai (TNK), East Kalimantan and in 
December the Ministry of Forestry sent 30 forestry police to 
investigate.  Meanwhile, the local Kutai Timur regency government 
has proposed carving out 24,000 hectares of TNK for encroachers that 
have settled there in at least seven villages.  In West Kalimantan, 
the park chief of Taman Nasional Kayan Mentarang (TNKM) said the 
park was vulnerable to clearing although it forms a central portion 
of the HOB, noting that some 21,000 people in 50 villages live 
within this 1.4 million hectare park (the second largest in 
Kalimantan).  In Taman Nasional Tesso Nilo (TNTN), Riau, the park 
chief said in October 2007 that forest clearing had affected more 
than 8,000 of the 38,000-hectare park. 
 
Implications for HOB and REDD 
----------------------------- 
¶9. (SBU) The rampant and continued clearing of forests, including 
protected areas, has clear implications for the Heart of Borneo 
(HOB) Initiative, and for the eventual success or failure of 
Reducing Emissions from Deforestation and Degradation (REDD) 
programs in Indonesia.  The HOB Initiative covers large portions of 
West, Central, and East Kalimantan Provinces.  Unless the GOI 
sustains enforcement efforts and forest governance improves, donors 
and environmental activists will question the credibility of 
national HOB action plans for conservation and sustainable 
development. 
 
¶10. (SBU) In his February 22 remarks (para 4), President Yudhoyono 
clearly connected illegal logging to the GOI's promotion of REDD 
during the run-up to and after the Bali climate change conference. 
The GOI hopes for a windfall of carbon credits generated from REDD 
projects under a post-Kyoto framework (whether from voluntary or 
mandatory markets).  These hopes could founder if buyers and 
sellers, or governments and donors financing pilots, are not 
convinced of the integrity of REDD projects -- i.e. that the rate of 
deforestation will in fact decline, generating real marketable 
credits.  Although Indonesia has the "comparative" advantage 
(possessing the world's second largest tropical forest area, and the 
fastest rate of deforestation), other countries could get ahead of 
Indonesia and reap the carbon market gains if its current efforts 
falter. 
 
HUME