Thursday, 11 October 2012


The government issued two Government Regulations that nullify illegal status of plantation and mining activities operated in forests areas without permit from the Forestry Minister. Those Government Regulations are Government Regulation No. 60/2012on Amendment to Government Regulation No. 10 on Procedure of Modification of Intended Uses and Functions of Forest Area. The Government Regulation will become a gate for plantation companies who will receive legal status after they have been operating without a Forest Relinquishment License.

And, the second Government Regulation is Government Regulation No. 61/2012 on Amendment to Government Regulation No. 24/2010 on Utilization of Forest Asia. This Government Regulation opens the door for mining activity which was formerly considered illegal because of operating without a license to use and leasehold forest area. Both Government Regulations were signed by President Susilo Bambang Yudhoyono on July 6, 2012.

Each Government Regulation stipulates that plantation and mining operations allowed are those who have had a business license issued by the regional government. Plantation or mining location must refer to regional regulation concerning Regional Spatial Planning of provinces or regencies/municipalities which was stipulated before the validity of Law No. 26/2007 on Spatial Planning. And, pursuant to Law No. 41/1999 on Forestry, plantation and mining activities are located in production forest or convertible production forest.

In the process of allowing of operation of plantation activity, the Forestry Minister will issue a Forest Relinquishment License. And, for mining activity, the Minister will issue a license to use and leasehold forest area. Plantation companies who wish to receive nullification are required to provide substitute land with ratio of size of land of 1:1 if it is located in production forest. Ratio of substitute land is increased to 1:2 if the plantation is located in the river basin (DAS), island, or province whose size of forest area is less than 30%. Substitute land is not required if plantation is located in convertible production forest.

According to Forestry Minister, Zulkifli Hasan, the background on the issuance of the two government regulations is there are no transitory provisions in Law No. 26/2007 stipulating forest use permit for mining and plantation activities which are in process of completion.

“The government regulation provides an elucidation that for plantation and mining permits which are already issued prior to Law No. 26/2007 and are not in contradictory to the laws, their forest use permits can be processed. But, after the issuance of Law No. 26/200, they cannot be processed”, the Forestry Minister said.

For example, in 2005 there was a request for forest use permit. But, when the request was in the process of completion, Law No. 26/2007 was issued. And, this matter is not stated in Law No. 26/2007. The Law is not applicable retroactively. So, because it is not stated in the Law, the permit cannot be processed.

The Minister opposes the idea that the government regulations are about nullification. He said that the issuance of the government regulations will not halt legal action on mining and plantation companies utilizing forests unprocedurally. “The violators will be punished. If they use production forest or protected forest without license, we will investigate them. But if they have plantation or mining permits, their forest use permits can be processed”, he said.

In the past two years, the Forestry Ministry has been diligently targeting forest demolition by plantation and mining companies. Concerning this matter, Forestry Minister Zulkifli Hassan, has sent Letter No. S.95/Menhut-IV/2010 in February 2010 to all regional heads to conduct inventarization of unprocedural forest use. The Forestry Ministry also made a field investigation jointly with other law enforcers, including the police, district attorney, Corruption Eradication Commission (KPK) and Judicial Mafia Eradication Task Force.

The result is that in Kalimantan alone, there are at least 2,000 plantation and mining companies with millions of hectares of size of area who use forest only by holding permits issued by the regional government. They were accused of using the forest illegally. Before using the forest, plantation companies are required to obtain forest relinguishment licens. While, mining companies are required to have license to use and leasehold forest. 

Business News - August 13, 2012   

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