Without Remedy

Human Rights Abuse and Indonesia's Pulp and Paper Industry

[1] Sometimes even seemingly mundane natural resources have greatly influenced political events. Recently an unlikely resource has been the subject of intense struggle-not gold or oil or luxury hardwoods, but sand. Sand mining for construction and fill has become big business and a large illegal sector has flourished. Sand exports to Singapore for the construction of its new off-shore airport have exploded in recent years leading to uncontrolled mining. Many speculate business interests in sand mining are behind the push to establish the islands off Riau's coast as a separate province. "Menyalip Pesta di Tikungan," Gatra, July 27, 2002.

[2] Christopher Barr, Banking on Sustainability: Structural Adjustment and Forestry Reform in Post-Suharto Indonesia (Washington, D.C.:World Wide Fund for Nature [WWF-International], and the Center for International Forestry Research [CIFOR], 2001).

[3] Mulyadi AT, Ministry of Forestry and Estate Crops-U.K. Tropical Forest Management Programme, "Pasokan dan Permintaan Kayu Bulat di Indonesia" ("Roundwood Supply and Demand in Indonesia"), presented at the World Bank sponsored Post-CGI meeting on forestry entitled "Removing the Constraints," Jakarta, January 26, 2000. http://lnweb18.worldbank.org/eap/eap.nsf/680c5352d463b70a852567c900770e56/ea9457a51d38757885256877006124a4?OpenDocument (retrieved November 4, 2002).

[4] 32,000 km2 (3.2 million hectares, or roughly one-third the total area of the province).  Caltex produces more than 50 percent of Indonesia's oil production, valued at roughly U.S.$8 billion annually, making it one of the country's largest income sources.

[5] Just over one million hectares had been approved for licenses in 1999. Department of Estate Crops, Data Statistik Perkebunan Provinsi Riau 1999 (Pekanbaru, Riau: Dinas Perkebunan, 2000).

[6] There is some overlap in oil palm and logging concession areas because forest is first logged and then converted to oil palm.

[7] Barr, Banking on Sustainability.

[8] Ibid.; David Brown, "Forgive Us Our Debts: Manipulation of IBRA by Indonesian Forest and Plantation Debtors; The Latest Chapter in Indonesia's Rentier Economy," draft consultant's report to CIFOR (copy on file at Human Rights Watch), Bogor, Indonesia, January 7, 2002.

[9] In 2001, oil and gas exports brought some U.S.$12 billion, forest product exports (including pulp and paper, plywood and sawnwood, but not oil palm) brought U.S.$5.3 billion. Bank of Indonesia, 2002, http://www.bi.go.id/bank_indonesia2-utama/data_statistik/data.asp?head=7 (retrieved October 3, 2002).

[10] In his presentation to the 2001 Consultative Group on Indonesia (CGI), the vice president of the World Bank for the East Asian Area and Pacific, Jamal-ud-din Kassum, noted that in 1999 the World Bank estimated that 65 percent of the population, or 120 million people, lived on U.S.$2 a day or less and that over 27 percent lived on less than U.S.$1. "Flight from Poverty," Jakarta Post, November 14, 2001.

[11] Mark Baird, Indonesia country director for the World Bank, "Farewell Remarks to the Jakarta Foreign Correspondents' Club," Jakarta, August 27, 2002, http://wbln0018.worldbank.org/eap/eap.nsf/Attachments/082702-MB-JFCC/$File/MB-JFCC+Remarks.pdf (retrieved October 3, 2002).

[12] World Bank, "Removing the Constraints: Background on Forests" presented at the World Bank sponsored Post-CGI meeting on forestry, Jakarta, January 26, 2000, http://lnweb18.worldbank.org/eap/eap.nsf/680c5352d463b70a852567c900770e56/ea9457a51d38757885256877006124a4?OpenDocument (retrieved November 4, 2002).

[13] Swidden cultivation is no-till, non-mechanized form of agriculture, which uses no fertilizers, herbicides, or pesticides. After one to three years, the field is allowed to lie fallow, to regenerate tree cover and soil fertility and interrupt pest reproduction cycles. As practiced in Indonesia, fruit or rubber trees are commonly planted interspersed in the natural forest regenerating on fallow plots.

[14] Far from being minor economic contributions, nationwide smallholder forest management provides approximately 80 percent of rubber, 80-90 percent of marketed fruits, at least 80 percent of the damar resin (from the tree Shorea javanica for use as an incense, and cosmetic and paint additive), and significant quantities of the tree-crop exports coconut, cinnamon, clove, nutmeg, coffee, pepper, and candlenut. G. Michon, H. deForesta, and A. Kusworo, eds., Complex Agroforests of Indonesia (Bogor, Indonesia: International Center for Research on Agro-Forestry, 2001).

[15] H. deForesta, A. Kusworo G. Michon, and W.A. Djamiko, eds.,  Agro-forest Khas Indonesia: Sebuah Sumbangan MasyarakatMasyarakat (Bogor, Indonesia: International Center for Research on Agro-Forestry, 2000).

[16] The Official Explanation of the 1945 Constitution, Chapter IV, Article 18, Section 2 reads "[T]here are roughly 250 types of self-governing villages (Zelfbesturende landschappen) and native communities (volksgemeenschappen) such as desa on java and Bali, negri in Minangkabau and dusun and marga in Palembang and so on. These areas have their own indigenous organizational structures (susunan asli) and because of them can be construed as areas with special attributes (dareah yang bersifat istimewah). The State of the Republic of Indonesia respect the status of these special areas and all the state regulations concerning them shall heed the original hereditary rights (hak-hak asal-usul) of these areas." As amended in August 2000, article 18, paragraph b now reads, "The state shall acknowledge and respect traditional societies along with their customary rights as long as these remain in existence and are in accordance with the societal development and the principles of the Unitary State of the Republic of Indonesia, and shall be regulated by law."

[17] Mulyadi AT, Ministry of Forestry and Estate Crops-U.K. Tropical Forest Management Programme, "Pasokan dan Permintaan Kayu Bulat di Indonesia"; and World Bank, "Indonesia: Environment and Natural Resource Management in a Time of Crisis," Jakarta, 2001. See also "Illegal Logging Accounts for Two Thirds of Indonesian Log Output," Asia Pulse/Antara,April 23, 2002, which quotes Directors of the Indonesian Association of Forestry Companies (APHI) as confirming these estimates.

[18] Derek Holmes, "Deforestation in Indonesia: A Review of the Situation in 1999," consultant's report to the World Bank (copy on file at Human Rights Watch), Jakarta, January2000.  See also Thomas Walton, Senior Environmental Specialist at the World Bank in Jakarta, "Is There a Future for Indonesia's Forests?" International Herald Tribune, January 25, 2000, http://lnweb18.worldbank.org/eap/eap.nsf/680c5352d463b70a852567c900770e56/ddda2de588081cf585256877007f02c5?OpenDocument (retrieved November 4, 2002). For an explanation of data sources and methodologies used to estimate deforestation rates, see Global Forest Watch, Indonesia: The State of the Forest (Washington D.C.: World Resources Institute, 2002).

[19] World Bank, Indonesia: Environment and Natural Resource Management in a Time of Transition (Washington, D.C.: The World Bank Group, 2001).

[20] Personal communication, Tim Brown, chief of Party, USAID funded Natural Resources Management Project. These comparisons are based on a conservative estimate of the annual cut (both legal and illegal) of sixty million cubic meters (m3) of wood, and an annual deforestation rate of two million hectares, both figures presented at the World Bank sponsored forestry meeting of the Post- CGI meeting, January 26, 2000. One hectare (ha) = 10,000m2 or 2.47 acres, or roughly the size of a soccer field. One cubic meter of timber is about the size and height of an average desk.

[21] See also, researchers' reports at the 2001 Post-CGI Meeting hosted by the World Bank in Jakarta, entitled "Removing the Constraints," January 26, 2000,

http://lnweb18.worldbank.org/eap/eap.nsf/680c5352d463b70a852567c900770e56/ea9457a51d38757885256877006124a4?OpenDocument (retrieved on October 3, 2002).

[22] Suripto, Menguak Tabir Perjuangan Suripto (Jakarta: Aksara Karunia, 2001); Environmental Investigation Agency and Telapak Indonesia, "Timber Trafficking: Illegal Logging in Indonesia, South East Asia and International Consumption of Illegally Sourced Timber," Jakarta, September 2001; Environmental Investigation Agency and Telapak Indonesia, "Illegal Logging in Tanjung Puting National Park: An Update," Jakarta, July 2000; Environmental Investigation Agency and Telapak Indonesia, "The Final Cut: Illegal Logging in Indonesia's Orangutan Parks," Jakarta, August 1999; World Wildlife Fund Indonesia, "Report of Survey on the Land Clearing by PT. RAPP (Baserah Sector) and Log Movement," unpublished manuscript (copy on file at Human Rights Watch), August 4, 2001; and Lesley McCulloch, "TriFungsi: Soldiers in Business," presented at the International Conference on Soldiers in Business, Jakarta, October 17-19, 2000, http://www.bicc.de/budget/events/milbus/confpapers/mcculloch.pdf (retrieved October 3, 2002). 

[23] Holmes, "Deforestation in Indonesia."

[24] Mark Baird, "Forest Crime as a Constraint to Economic Development in East Asia," presented at the Forest Leadership and Law Enforcement Conference, Bali, September 2001,

http://wbln0018.worldbank.org/eap/eap.nsf/Attachments/FLEG_S8-2/$File/8+2+Mark+Baird+-+Indonesia,+WB.pdf (retrieved October 3, 2002).

[25] Christopher Barr, "Discipline and Accumulate: State Practice and Elite Consolidation in Indonesia's Timber Sector, 1967-1998," MSc thesis (copy on file at Human Rights Watch), Cornell University, 1998; Nancy Peluso, Rich Forests, Poor People: Resource Control and Resistance in Java (Berkeley, California: University of California Press, 1995); and The Center for International Environmental Law and the Indonesian Institute for Research and Community Advocacy (ELSAM), Whose Natural Resources? Whose Common Good?  (Jakarta, Indonesia: ELSAM, 2002).

[26]William Ascher, "From Oil to Timber: The Political Economy of Off-Budget Development Financing in Indonesia," Indonesia 65: 37- 61, 1998. While most of the reforestation money went to pulp and paper concessionaires as subsidies, a significant portion of it was misallocated for non-forestry project, including the 1997 Southeast Asia Games in Jakarta. Bob Hasan also received Rp250 billion (U.S.$100 million) of reforestation funds to establish a pulp mill.  The interest on the loan was 4 percent below commercial banks, which would allow him to make a large profit simply by depositing the money in a bank. Another dubious use of Rp500 billion of reforestation funds was the ill-conceived 'One Million Hectare Project' to clear-cut natural forest and covert the infertile and highly flammable peat soils into rice fields, a scheme that resulted in massive forest fires in 1997. In 1994, Soeharto ordered an interest-free loan of Rp400 billion (U.S.$185 million) from the fund for then Technology Minister BJ Habibie's state-owned aircraft manufacturer to help it develop a commuter jet. In 1997, the Forestry Minister denied reforestation money had gone into Soeharto son's doomed 'national car' project (funded by state banks), but added that it could at any time if the president wished it. "Mega Queries Use of Reforestation Fund," Laksamana.net,January 24, 2002.

[27] Basic Law on Forestry (Undang-Undang Pokok Kehutanan) No. 5/1965

[28] Forest Investment Law (Undang-Undang Penanaman Modal Asing) No. 1/1967

[29] Domestic Investment Law (Undang-Undang Penamaman Modal Domestik) No. 1 /1968

[30] The term "state forest" indicated more of state intention of control than of the actual presence of trees since it is specifically defined in the 1967 Basic Forestry Law as "land, with or without forest (berhutan atau tidak berhutan), that is declared by the state to be forest" (article 1, section 4).  State forest is further classified according to its designated "function" (fungsi) as "limited production forest," "production forest," "conversion forest" (for clear-cutting and "conversion to non-forest uses," such as plantation), "protected forest," and "conservation forest."

[31] McCulloch observes that the military has justified its role in maintaining security through direct involvement in politics as a legitimate "dwi fungsi,"ordual function. Actually, McCulloch argues, the military plays a "tri fungsi" through its additional central role in business. McCulloch, "TriFungsi: Soldiers in Business."

[32] McCulloch's personal interviews with former Minister of Defense Juwono Sudarsono. McCulloch, "TriFungsi: Soldiers in Business." 

[33] David Brown, "Addicted to Rent: Corporate and Spatial Distribution of Forest Resources in Indonesia,"Indonesia U.K. Tropical Forestry Management Programme: Jakarta, September 1999, http://www.geocities.com/davidbrown_id/Atr_main.html (retrieved October 3, 2002).

[34] Ostensibly to fund the "welfare" of soldiers, yayasan in reality fund all manner of military projects, as well as being a source of personal gain for military elite.

[35] Examples of military foundations with business interests have been documented by McCulloch in the forestry sector, including logging, plywood mills and pulpwood and plywood plantations.  See Lesley McCulloch, "TriFungsi: Soldiers in Business."

[36] Brown, "Addicted to Rent."

[37] Christopher Barr, "Bob Hasan, the Rise of Apkindo, and the Shifting Dynamics of Control in  Indonesia's Timber Sector," Indonesia 65: 1-36, 1998.

[38] Marganti Manaloe, Penjaraku: Ironi Penegakan Hak Asasi (Pekanbaru, Riau: Opsi, 2001).

[39] Surat Dakwaan Nomor Reg Perkara PMD/BKN/EPK/1/1/1998.

[40] Human Rights Watch interviews with community activists, Pekanbaru, Riau, January 21, 2002; and  "Meningkat, Pengungsi dari Tembusai," Media Indonesia, October 28, 1999.  In December 1999, frustrated by the lack of government action on their complaints about the attacks and land seizures by PT Tor Ganda, local residents retaliated by burning down the offices of the sub-district head (camat) and police station (Mapolsec). See "Kasus Pembakaran Kantor Camat, Mapolsec di Tembusai: Belum Ada Yang Jadi Tersangka," Suara Kita,December15, 1999; and "Warga Tembusai bersembunyi di Hutan," MediaIndonesia, December 20, 1999. In March 2000, the community set up a blockade of PT Tor Ganda oil palm trucks in Bukit Harapan over unresolved land disputes. See Riau Pos, March 28, 2000. In 2001, villagers began to charge Tor Ganda company trucks a "village tax" of Rp5 million a month to use their roads, which the company director called "pure extortion." See Antara, May 20, 2001, cited in Lesley Potter and Simon Badcock, "The Effect of Indonesia's Decentralization on Forests and Estate Crops: Case Study of Riau Province, the Original Districts of Kampar and Indragiri Hulu," CIFOR, Bogor, Indonesia, September 18, 2001, p. 80, http://www.cifor.cgiar.org/publications/pdf_files/Books/Cases percent206-7.pdf (retrieved November 4, 2002).

[41] Maj. Gen. Sjafrie Sjamsoeddin, appointed the new Indonesian Military (TNI) spokesman, was implicated in the death of three student protestors at Trisakti in 1998. See Tiarma Siboro, "Sjafrie installed as TNI spokesperson amid controversy," Jakarta Post, March 5, 2002. Former commander of Soeharto's presidential guard, Gen. Endriartono Sutarto was appointed as head of the armed forces amid allegation of his involvement in arming East Timor militias. See "Questions on New Commander," Laksamana.net, May 15, 2002, http://www.laksamana.net/vnews.cfm?ncat=2&news_id=2722 (retrieved November 4, 2002). Brigadier General Sriyanto was appointed as head of army special forces although he has been alleged to have been involved in a number of human rights cases, including the attacks on Jakarta protestors in 1998, arming of militias in East Timor, and the Tanjung Priok riots. See "New Kopassus Chief No Stranger to Abuses," Laksamana.net, July 1, 2002, http://www.laksamana.net/vnews.cfm?ncat=48&news_id=3095  (retrieved November 4, 2002). Three of the generals also directly implicated in the East Timor massacres have been reassigned to other areas of separatist conflict; Maj. Gen. Adam Damiri was reassigned to Aceh. See Lindsay Murdoch, "Timor Hard Man Takes over Aceh," The Age, March 27, 2001. Maj. Gen. Mahidin Simbolon was reassigned to Papua, and Major General Hendropriyono was appointed Indonesia's intelligence chief-- both generals allegedly played an important role in relation to intelligence aspects of the TNI's militia operation. See James Dunn, UNTAET's expert on crimes against humanity in East Timor, 2000-2001, "The Indonesian Tribunal: A Matter of Justice or Political Diversion?" August 17, 2002, http://www.etan.org/et2002c/august/18-24/18itribunl.htm (retrieved on October 3, 2002). See also the website "Masters of Terror" for a complete set of profiles of the key suspects in the 1999 destruction of East Timor, http://yayasanhak.minihub.org/mot/SortByAlpha.htm (retrieved November 25, 2002).

[42] Tim Dodd, "Megawati and the Military: Too Close for Comfort," Australian Financial Review, July 23, 2002; Human Rights Watch, "The Indonesian Military and Ongoing Abuses," background briefing, July 31, 2002; and Human Rights Watch, "Indonesia Verdict Confirms Justice Elusive for East Timor Crimes," press release, August 15, 2002. See also, International Crisis Group, "The Implications of the Timor Trials," Jakarta/Brussels, May 8, 2002 and International Crisis Group,"Resuming U.S.-Indonesia Military Ties," Jakarta/Brussels, May 21, 2002.

[43] Munir, "The Stagnation of Reforms in Indonesia's Armed Forces," International Forum on Indonesian Development (INFID) position paper (copy on file at Human Rights Watch), July 2002; and Human Rights Watch, "The Indonesian Military and Ongoing Abuses" Press Backgrounder, July 31, 2002. See also, International Crisis Group, "Resuming U.S.-Indonesia Military Ties," Jakarta/Brussels,May 21, 2002.

[44] Lesley McCulloch, "TriFungsi: Soldiers in Business"; John McCarthy, "'Wild Logging': The Rise and Fall of Logging Networks and Biodiversity Conservation on Sumatra's Frontier," CIFOR Occasional Paper 31, Bogor, Indonesia, 2000, http://www.cifor.cgiar.org/publications/pdf_files/OccPapers/OP-31.pdf (retrieved November 4, 2002).

[45] Environmental Investigation Agency and Telapak Indonesia, "Timber Trafficking: Illegal Logging in Indonesia, South East Asia and International Consumption of Illegally Sourced Timber," Jakarta, September 2001; and Environmental Investigation Agency and Telapak Indonesia, "Illegal Logging in Tanjung Putting National Park: An Update," Jakarta, July 2000.

[46] World Wildlife Fund Indonesia, "Report of Survey on the Land Clearing by PT. RAPP (Baserah Sector) and Log Movement," unpublished manuscript (copy on file at Human Rights Watch), August 4, 2001.  See also, World Wide Fund for Nature and Department for International Development (DFID), "Laporan Perkembangan Sawmill Di Wilayah Selatan Taman Nasional Bukit Tigapuluh & Di Sekitar Area KPHP Pasir Mayang," Unpublished report (copy on file at Human Rights Watch), Indonesia-U.K. Tropical Forest Management Programme, Jakarta, Indonesia, 1998.

[47] Lesley McCulloch, "TriFungsi: Soldiers in Business"; and Suripto, Menguak Tabir Perjuangan Suripto. It is widely believed that Forestry Minister Nur Mumudi was removed for refusing to remove Suripto from his post as director general. His successor, Marzuki Usman, fired Suripto as one of his first orders of business, but not after Suripto had deposited information regarding corruption charges against Pangestu and Tutut. Suripto was fired the following week. Former President Wahid also alleged that Suripto had been colluding with military special forces (Kopassus) to topple him, and charged Suripto with treason-an accusation for which he later apologized when Suripto filed defamation counter-charges. "PR Suripto buat dua Marzuki," Detik.com, March 23, 2001, http://www.detik.com/peristiwa/2001/03/23/2001323-085445.shtml (retrieved November 4, 2002); "Official locked horns with big timber and lost," Chicago Tribune, July 7, 2001; "Why was the Forestry Minister Axed?" Laksamana.net, March 23, 2001, http://www.laksamana.net/vnews.cfm?news_id=734 (retrieved November 4, 2002); "Kosa Kata Baru Politik Indonesia: Dinurmamudikan," Radio Nederland, March 20, 2001;  "Apa Sebenarnya Akar Permaslahan antara Suripto dan Gus Dur?" Radio Nederland, May 5, 2001; "Minister Says He Was Fired for Defying Wahid's Order to Sack Aide," Agence France Presse, March 16, 2001; and "Forestry Minister Discloses President's Reasons for Firing Him," Antara, March 16, 2001.

[48] Information also submitted by Suripto implicated (but never resulted in formal charges) Texmaco chairman Marimuti Sinavasan, Gadjah Tunggal group Chairman Syamsul Nursalim, and Soeharto's half brother Probosutedjo. "Documents on Alleged Graft by Prajogo Submitted," Jakarta Post, April 19, 2001.

[49] Letter of Intent from Indonesian government to the IMF, January 20, 2000, paragraph 31.

[50] Two from the Ministry of Defense, three from the army, and one each from the TNI headquarters, navy, and air force. Letter of Intent from Indonesian government to the IMF, August 27, 2001, Paragraph 34.

[51] Human Rights Watch and International Forum on Indonesian Development (INFID) meeting with IMF representatives Stephen Schwartz (Deputy Division Chief, Asia Pacific Department), Andrea Richter (Economist, Indonesia Program), and Sanjaya Panth (Senior Economist), Washington, D.C., June 18, 2002.

[52] M. Gillis, "Indonesia: Public Policy, Resource Management and the Tropical forest," in R. Repetto and M. Gillis, eds., Public Policies and the Misuse of Forest Resources (Cambridge, U.K.: Cambridge University Press, 1988).

[53] Brown, "Addicted to Rent."

[54] Barr, "Bob Hasan, The Rise of Apkindo."

[55] The IMF clearly recognized the damaging effects of these subsidies and market controls, and required that they be removed by the end of the year in the January 15, 1998, Letter of Intent and Memorandum of Financial Policies from the Indonesian government. See also, World Bank, Indonesia: Environment andNatural Resource Management in a Time of Transition (Washington, D.C.: World Bank, 2001).

[56] This report was issued long after the end of Soeharto's New Order (March 10, 1999). U.S. Embassy Economics Section, "If a Tree Falls in the Forest, Who Has the Export Rights? Indonesia Forestry Regulations 1999," http://www.usembassyjakarta.org/econ/forestreg.html (retrieved October 3, 2002).

[57] Production costs are estimated to be U.S.$200 per ton of wood, a fraction of what it costs to produce pulp in North America, which leads world production. This is because of cheap access to wood, government subsidies (including start up capital and gasoline subsidies) and tax holidays, cheap labor, and close proximity and low transportation costs to important Asian markets.

[58] U.S.$3.5 billion in foreign exchange.

[59] Based on installed capacity. N. Scotland, A. Frasier and N. Jewel, "Roundwood Supply and Demand in the Forest Sector in Indonesia," unpublished manuscript, Indonesia-U.K. Tropical Forest Management Program (ITFMP), 1999. See also, Neil Scotland, "Indonesian country paper on illegal logging," paper prepared for the World Bank-WWF Workshop on Control of Illegal Logging in East Asia (copy on file at Human Rights Watch), Jakarta, August 28, 2000. The sawmill industry has also over-expanded and is by far the largest consumer of wood, roughly seventy million m3 annually, also mainly from illegal sources. Large, valuable trees are selectively sold to plywood mills and the remaining smaller, defective or undesirable timber is sold to pulp mills¾a combined effect that completely clear-cuts the forest.

[60] Barr, Banking on Sustainability.

[61] Diarmid O'Sullivan, "Indonesia: Tempting but not without Risks," Financial Times, Industry Surveys, World Paper and Pulp, http://specials.ft.com/ln/ftsurveys/industry/sc7bbe.htm (retrieved October 3, 2002).

[63] Asia Pulp & Paper  (APP), http://www.asiapulppaper.com/content/about.asp?menu=1 (retrieved October 3, 2002); and press release emailed to Human Rights Watch from APP/Sinar Mas Group on June 19, 2002 (copy on file at Human Rights Watch).

[64] Riau Andalan Pulp & Paper (RAPP), owned by Tanoto family conglomerate Raja Garuda Mas, is also located in Riau and is one of APP's main competitors. RAPP is tied with Indah Kiat for the world's largest stand-alone pulp mill. RAPP is wholly-owned by Singapore-based holding company APRIL (Asia Pulp Resources International, Ltd).

[65] Barr, Banking on Sustainability.

[66] "If within the concession area there is land that is privately owned, village land, village gardens, or rice fields that are worked by a third party, this land must be excised from the working area of the plantation. If this land is required for the plantation Arara Abadi must settle the matter with all relevant parties and according to prevailing law." Ministry of Forestry Decree SK No. 743 /KPTS-II/1996 (article 4, paragraph 1).

[67]The survey did not even cover the entire sub-district; only fourteen villages were included. Tim Teknis Klarifikasi Penyelasaian Masalah PT Arara Abadi Dengan Masyarakat Petalangan, "Laporan Pelaksanaan Hasil Pengecekan Tata Batas Areal HPHTI PT Arara Abadi," unpublished survey report, Kantor Bupati Pelalawan, Riau, August 1, 2001..

[68] "Land Ownership Disputes" (Rekapitulasi Maslah Lahan di Areal HPHTI PT Arara Abadi Distrik), cited in AMEC Simons Forest Industry Consulting,"APP Pulp Mills & Sinar Mas Group Forestry Companies: Preliminary Wood Supply Assessment," Document 2111 B1754aD10, October 12, 2001, p. 32.

[69] Human Rights Watch interviews with APP and Arara Abadi central staff, Tanggerang, February 13, 2002; with APP/Indah Kiat and Arara Abadi field staff, Indah Kiat mill site, Perawang, Riau, February 14, 2002.

[70] Human Rights Watch interview with Soebardjo, Director of Arara Abadi, Jakarta, February 13, 2002 (interview conducted in English).

[71] He even expressly terms the rights "hak ulayat," which is the term used to recognize and title customary rights in the Basic Agrarian Law No. 5/1960 (one of the first laws passed after Independence). Unclaimed land was assumed to be under state ownership. However, the implementing regulations for the law were never passed and the law has had little effect in practice, as most communities were never made aware that such rights could be titled.

[72] Derwin Pereira, "U.N. Condemns Indonesia's Justice," Straits Times, July 23, 2002.

[73] "Lifting the Lid on the Judicial 'Mafia'," Indonesian Corruption Watch, Jakarta, 2002.

[74] Human Rights interview with a high ranking provincial police officer, February 19, 2002.

[75] Ministry of Forestry Decree SK No. 743 /KPTS-II/1996, District Regulation Surat Bupati Kampar November 21, 1989.

[76] Aliansi Peduli Pelalawan (APPEL), Prahara Abadi? Buku Putih Peristiwa Penyerangan Massal Karyawan Pam Swakarsa PT Arara Abadi, (Pekanbaru, Riau: APPEL, May 2001).

[77] Barr, Banking on Sustainability.

[78] Ibid.

[79] Human Rights Watch interviews with APP and SMG staff in Jakarta and Perawang, February 13-14, 2002. See also AMEC Simons Forestry Consulting,"APP Pulp Mills & Sinar Mas Group Forestry Companies: Preliminary Wood Supply Assessment," Document 2111 B1754aD10, October 12, 2001.

[80] "Secured creditors file suit against APP, asset sell-off could follow," Paperloop.com monthly report, September 25, 2002, http://www.convertingloop.com/news_info/converting_month.shtml (retrieved September 30, 2002)

[81] While the immediate cause that led to the collapse of regional currencies and economies in 1997 was the rapid flight of foreign capital, financial analysts widely concur that among the primary roots of Indonesia's economic collapse were fundamental structural vulnerabilities created by speculative excesses, poor financial risk management, heavy reliance on foreign lending that were all enabled and indeed encouraged by corruption, weak governance and inadequate regulation of the banking system. Among these analysts are Indonesian economist and now state minister for national development planning, Kwik Kian Gie, American economist Paul Krugman, the International Monetary Funds (IMF) and World Bank's own economists, and former Coordinating Minister of Finance Rizal Ramli. See "The Doomsayers whose voices went unheeded," StraitsTimes, March 23, 1998; Mari Pangestu and Maggir Habir, "Boom, Bust and Restructuring of Indonesian Banks," IMF Working WP02/66, Washington, D.C., April 2002; "IMF Factsheet: IMF Response to the Asian Crisis," International Monetary Fund, January 17, 1999, http://www.imf.org/external/np/exr/facts/asia.htm (retrieved on October 3, 2002); "Combating Corruption is Key to Indonesia's Economic Recovery, World Bank Advises," World Bank Press Release No. 99/1947/EAP, September 19, 1998, http://www.worldbank.org/html/extdr/extme/1947.htm (retrieved November 4, 2002); "Recovery from the Asian Crisis: The IMF Role," IMF staff, June 23, 2000, http://www.imf.org/external/np/exr/ib/2000/062300.htm (retrieved October 3, 2002); and Jonathan Pincus and Rizal Ramli, "Indonesia: From Showcase to Basketcase," Cambridge Journal of Economics 22 (6): 723-34, 1998.

[82] Figures cited by James Wolfensohn, in his address to the 1998 World Bank/IMF annual meetings. He cites the estimate before 1997 as 11 percent, but this figure has been quite controversial. Dr. Jeffrey Winters, a professor of political science at Northwestern University, was a USAID consultant during the early 1990s and reports that the earlier official poverty estimates were a pure government fabrication and that the real figures were substantially higher. He further alleges that the international donor institutions had full knowledge of this but repeated the government's stimates nonetheless. See Marcus Brauchli and Jay Solomon, "Speak No Evil: Was the World Bank Part of Indonesia's Problem?" Asian Wall Street Journal, June 15, 1998. In his 1998 speech, even Wolfensohn admitted that the 11 percent estimate was based on a poverty line defined at those who earned U.S.$1 a day, which obscured those who earned just $1.25 a day.

[83] World Bank, Indonesia: Environment and Natural Resources in a Time of Transition (Washington, D.C.: The World Bank Group, 2001).

[84] World Bank, Indonesia in Crisis: A Macro-Economic Update (Washington, D.C.: The World Bank Group, 1998).

[85] There have been seven chairmen in four years.

[86] M. Taufiqurohman, Ronny Fibri, Agus Hidayat, and Iwan Setiawan, "The Big Fish Never Lose," Tempo, January 28, 2002. Press reports allege that former President Abdurahman Wahid even instructed Attorney General Marzuki Darusman to delay prosecution of prominent tycoon debtors Texmaco Group chairman Marimutu Sinivasan, Barito Pacific Group chairman Prajogo Pangestu, and the chairman of the Gadjah Tunggal Group, Syamsul Nursalim, on the grounds that these businesses employed thousands of workers and were needed to aid economic recovery. "Inequality before the Law," Jakarta Post,October 21, 2001.

[87] Christopher Barr, David Brown, Anne Casson, and David Kaimowitz, "Corporate Debt and Indonesian Forestry Sector," in Which Way Forward? People, Forests and Policymaking in Indonesia, Carol J. Pierce Colfer, and Ida Aju Pradnja Resosudarmo, eds., (Washington, D.C: Resources for the Future Press, 2002); Barr, "Profits on Paper" in Banking on Sustainability; Brown, "Addicted to Rent" and "Forgive Us Our Debts"; Scotland, Frasier and Jewel,  "Roundwood Supply and Demand"; Casson, "The Hesitant Boom: Indonesia's Oil Palm Sub-Sector in an Era of Economic Crisis and Political Change," occasional paper No. 29 (Bogor, Indonesia: Center for International Forestry Research, June 2000); Stephanie Fried and Titi Soentoro, "ECA Finance in Indonesia: Ecological Destruction and Corruption" Environmental Defense and Bioforum, Occasional Paper 2, Washington, D.C., December 1, 2000; and Haike Mainhardt, "IMF Intervention in Indonesia: Undermining Macroeconomic Stability and Sustainable Development by Perpetuating Deforestation," WWF Macroeconomics Program Office, Washington, D.C., August 2001.   

[88] Brown, "Addicted to Rent"; and Barr, Brown, Casson and Kaimowitz, "Corporate Debt" estimate that 70 percent of this debt is held by only ten large conglomerates. These same conglomerates were further calculated to be responsible for U.S.$2.4 billion in domestic non-performing loans and U.S.$15 billion in foreign debt.

[89] Barr, Brown, Casson and Kaimowitz "Corporate Debt"; Barr, Banking on Sustainability.

[90] Marzuki Usman, former head of the Capital Market Supervisory Board (Bapepam), "RI Banking System: Rewarding the Bad Guys," Jakarta Post, July 24, 2002. See also Mari Pangestu and Manggi Habir, "Boom, Bust, and Restructuring of Indonesian Banks," IMF Working Paper, Jakarta, April 2002. The government has announced a plan to lift the guarantee by February 2004, in what news magazine Tempo termed "Finance Minister Boediono's most valuable present to the Indonesian people," and replace it with a savings guarantee scheme modeled on the U.S. Federal Deposit Insurance Corporation (FDIC) for accounts less than Rp100 million. "Changing the Bedclothes," Tempo, August 5, 2002.

[91] Indonesian Bank Restructuring Agency (IBRA), Monthly Report no 11, February 2001. http://www.bppn.go.id (retrieved October 3, 2002).

[92] Tom Wright and I Made Senatana, "Foreign Creditors Call for Independent APP Management," Dow Jones Newswire,June 24, 2002.

[93] Official regulations do prohibit old owners from buying back their non-performing loans at a discount, but most analysts agree that there is little that would prevent such sales if a third party is used. "Sharkbait?" Tempo, July 30, 2002.

[94] See also, M. Taufiqurohman, Leanika Tanjung and Rian Suryalibrata, "Party Time for the Rich," Tempo, July 23, 2002; Dadan Wijaksana, "Bad Debtors May Benefit from IBRA Loan Auction," Jakarta Post, July 15, 2002; Timothy Mapes, "IBRA Unit Halts Sales On Fine From Regulator --- Decision Crimps Indonesia's Reform Plans," AsiaWall Street Journal, June 5, 2002.

[95] Dadan Wijaksana, "Experts Criticize IBRA's Plan on BII's Rights Issue," Jakarta Post, May 15, 2002; and M. Taufiqurohman, Agus S. Riyanto and Rian Suryalibrata, "Red Carpet for Lousy Performers," Tempo, May 4, 2002..

[96] U.S.$13 billion of this liquidity was misallocated by banks for expansion or speculation on the rupiah.

[97] "In Asia, Indonesia Looks Most Vulnerable to Argentine-Style Crisis," International Herald Tribune, January 15, 2002.

[98] Bert Hoffmann, Senior Economist at the World Bank Indonesia, "Issues in Indonesia's Budget Management," DFID workshop for the Indonesian Department of Defense, Jakarta, February 26-27, 2000, http://lnweb18.worldbank.org/eap/eap.nsf/Attachments/BH-022702/$File/BH-022702.pdf (retrieved November 4, 2002).

[99] Barr, Banking on Sustainability.

[100] Ibid. Industry analysts say that the 40 percent price dip in 2000/200 was in part (together with U.S. economic downturn) due to the "aggressive" overcapacity of competing pulp companies APP and APRIL (Ausnewz Pulp & Paper Yearbook 2001, Hobart, Tasmania: Ausnews Intelligence Service). See also Prime Sarmiento, "Aggressive Sales Of APP Pulp Drag Market Lower – Sources," Dow Jones Newswires, May 4, 2001.

[101] APP never officially filed for bankruptcy, but it stopped all payment on dollar denominated debt and declared a debt moratorium. In April 2001, Standard & Poor gave it a "D" rating, signifying default. See "Asia's Worst Deal," BusinessWeek, August 13, 2001.

[102]A company is "delisted," or has its stocks removed from trading on the NYSE, when it falls below a threshold stock price of U.S.$1 per share. See "NYSE Suspends Trading in Asia Pulp & Paper Company Ltd. and Moves to Remove from the List," http://www.nyse.com/press/NT00042766.html (retrieved November 21, 2002) and "NYSE 2001 Fact book," www.nyse.com/pdfs/2001_factbook_04.pdf (retrieved November 21, 2002).

[103] Abe De Ramos, "From Junk to Gold," Corporate Finance, October 2000; and Michael Shari, "Asia's Worst Deal," Business Week, August 31, 2001.

[104] See Consultative Group on Indonesia (CGI) meetings 2000- 2002, including the January 2000 Post-CGI meeting hosted by the World Bank entitled "Removing the Constraints," which was specifically devoted to forestry reform; Letter of Intent from Indonesian government to the IMF, January 1999; Ministry of Forestry statement to the CGI, February 1, 2000. Much of the initial impetus for forestry reform following the fall of Soeharto can be attributed to engagement of the IMF and CGI in the forest sector through conditionalities for the U.S.$43 billion emergency loan and subsequent multilateral and bilateral lending. In addition, the World Bank hosted a Post-CGI seminar on January 26, 2000 entitled "Removing the Constraints," which brought together a broad range of stakeholders from government (including representatives of the ministries of forestry, finance, trade, and planning) as well as representatives from civil society organizations, academic institutions and the bilateral and multilateral donor communities to discuss forest sector reforms. Following the seminar the Indonesian government agreed to create an Inter-Departmental Committee on Forest (IDCF) to formulate a national forest policy and address eight of the most pressing issues discussed at the seminar, including coordinated action against illegal loggers, especially within national parks; downsizing the forest industry to balance demand with legally available wood supply; closure of heavily indebted wood industries under the control of the Indonesian Bank Restructuring Agency (IBRA); and linking debt write-off with capacity reduction. But progress to date on these commitments has been very slow.

[105] "Riau Termiskin di Indonesia," Riau Pos, March 10, 1999; and "Pembangunan SDM," Riau Pos, April 9, 1999.

[106] "Kedaulatan Riau Dideklarasikian:  Riau Merdeka Menyusul," Riau Pos, March 16, 1999; and Governor H.E. Saleh Djasit, "A View from the Provinces: Riau," presentation to the U.S.-Indonesian Society, Washington, D.C., September 18, 2001.

[107] A U.N. sponsored referendum on independence from Indonesia was held in August 199 in which the East Timorese voted overwhelmingly for independence. When the results were announced, loyalist militias, suspected to have been organized and armed by the Indonesian military, began massacring the local population and razing the capital city of Dili. U.N. Peacekeepers finally arrived on September 20, 1999.

[108] First mandated by parliament in 1998 (Tap MPR No XV/MPR/1998 of Fiscal and Administrative Decentralization) following Soeharto's resignation.

[109] Policies still controlled by the central government are foreign policy, national security, judiciary, fiscal policy, and religion.

[110] Some areas receiving special autonomy packages, such as Papua and Aceh, which will receive a higher percentage (70 percent of oil and gas revenue) in an attempt to quell separatist movements.

[111] Christopher Duncan, "The Aftermath of Civil War," Inside Indonesia,January 2002; and "Menyalip Pesta di Tikungan," Gatra, July 27, 2002.

[112] McCarthy, "Wild Logging." Another form of laundering illegal wood is for the logging bosses to bribe the police or forestry department to "confiscate" illegal wood, which is then "auctioned off" through a unfair bidding process, allowing the owners to receive all the necessary permits and papers for their illegally harvested wood at a low price. Global Forest Watch, Indonesia: State of the Forest.

[113] Governmental Decree PP 34/ 2002 on Forest Planning and Utilization

[114] "Tokoh Riau Tolak Revisi UU Otda," Riau Mandiri,February 5, 2002; "Revisi UU Otda No 22 th 99 Bahayakan Daerah," Riau Mandiri, February 5, 2002,

[115] "Unity in danger, Mega warns," Jakarta Post, October 30, 2001.  Indeed, this was the reason that administrative powers under autonomy were given to the district, rather than the provinces, which might be powerful enough and with enough regional ethnic identity to attempt to secede.

[116] Sadanand Dhume, "A Windfall for Riau," Far Eastern Economic Review, February 21, 2002.

[117] "Ehtishad Ahmad and Bert Hofman, "Indonesia: Decentralization-Opportunities and Risks," IMF and World Bank, Jakarta, March 2000.

[118] Lesley Potter and Simon Badcock, "The Effect of Indonesia's Decentralization on Forests and Estate Crops: Case Study of Riau Province, the Original Districts of Kampar and Indragiri Hulu," CIFOR, Bogor, Indonesia, September 18, 2001, http://www.cifor.cgiar.org/publications/pdf_files/Books/Cases percent206-7.pdf (retrieved November 4, 2002).

[119] Derek Holmes, "Deforestation in Indonesia: A Review of the Situation in 1999," Jakarta, World Bank, January 2000; H. Kartodihardjo and A. Supriono, "The Impact of Sectoral Development on Natural Forest Conversion and Degradation: The case of Timber and Tree Crop Plantations in Indonesia," CIFOR Occasional Paper No. 26 (E).; Global Forest Watch, Indonesia: The State of the Forest.

[120] Global Forest Watch, Indonesia: State of the Forest.

[121] Memorandum of Financial Policies (MEFP), January 15, 1998, paragraph 50. "To strengthen overall environmental sustainability, the government will draft and establish implementation rules for the new environmental law by March 1998. In addition, government will review and raise stumpage fees, auction concessions, lengthen the concession period, and allow transferability by June 1998, and will implement performance bonds and reduce land conversion targets to environmentally sustainable levels by the end of 1998."

[122] The Consultative Group on Indonesia (CGI) as the name suggests, is a consultative body and does not place conditions on the government. However, each individual donor identifies its own conditions for loans. The IMF is a member of the CGI but does not pledge at the CGI as it loans money to the Bank of Indonesia, not to the government.

[123] The districts' claims have been countered by the recently promulgated Government Decree 34/2002 on Forest Planning and Utilization, which recentralized much of the permitting process and the authority for designation of lands for conservation and protection. However, without effective law enforcement, there will be little way for the central Ministry to reassert its control

[124] Legislation that would grant Presidential powers to dissolve local parliaments was proposed but defeated due to outcry in the provinces. Santi W.E. Soekanto, "Regional autonomy-a double standard set in motion?" Jakarta Post, December 27, 2001; and "Autonomy-what Jakarta giveth, Jakarta taketh away," JakartaPost, December 31, 2001.

[125] Tiarma Siboro and A'an Suryanan, "Councilors reject autonomy revision," Jakarta Post, January 31, 2002; "Daerah Tidak Ingin UU Otda Direvisisi," Riau Mandiri, February 6, 2002; "Pemerintah Pusat Ingin Kembalikan Sistem Sentralisasi," Riau Mandiri, February 7, 2002. The stakes are obviously high, especially in resource-rich provinces, as illustrated by the fistfight that broke out on the national parliament floor during a debate over the role of regional representatives. Bambang Nurbianto, "Brawl brings spotlight on regional representatives faction," Jakarta Post, November 3, 2001.

[126] Potter and Badcock.  "The Effect of Indonesia's Decentralization."

[127] CIEL and ELSAM, Whose Resources?

[128] Reed Wadley, "Community Co-operatives, Illegal Logging, and Regional Autonomy: Empowerment and Impoverishment in the Borderlands of West Kalimantan, Indonesia," presentation (copy on file at Human Rights Watch) at the conference on Resource Tenure, Forest Management, and Conflict Resolution, Australian National University, Canberra, April 9-11, 2001;  McCarthy, "Wild Logging"; "Forests and Regional Autonomy: All in the Hands of the Regents," Tempo, July 24, 2001; and "Land disputes disruptive, confusing in Irian Jaya," Jakarta Post, November 10, 2001.

[129] Police-organized militia clashed with student protestors during the 1998 special session of the parliament. "Civilian guards pose threat in Indonesia says rights group," Human Rights Watch press release, November 10, 1998. These militia have frequently have been accused of violence and extortion against Jakarta street vendors, pedicab drivers, residents of squatter settlements, and recent immigrants from outlying areas who have no Jakarta ID card. "Public furious at Tramtib's violence, demand changes," Jakarta Post, January 26, 2002.  In addition, gangs of thugs attacked communities protesting oil palm plantations in Riau. "Meningkat, Pengungsi dari Tembusai," Media Indonesia, October 28, 1999; and Muhammed Saleh, "Awas Konflik Etnis di Tanah Melayu," Forum Keadilan, Edition 15, July 28, 2002.

[130] Indonesian Forest Industry Association (APHI), "Darurat: Konflik Sosial," Majalah Hutan Indonesia (7): March 2001

[131] Dianto Bachriadi, "Kekerasan dalam Persoalan Agraria dan Relevansi Tututan Dijalankannya Pembaruan Agraria di Indonesia Pasca Orde Baru," unpublished manuscript (on file at Human Rights Watch), Jakarta, Konsorisum Pembaruan Agraria (KPA), 2000.

[132] "Community Forest System Managements (SHK) in Indonesia," Voices from the Forest, August 2000, http://www.ntfp.org/voices/voices3/contents3.html (accessed July 8, 2002).

[133] Human Rights Watch interview with village leader and several other witnesses, Beringin, February 3, 2002.

[134] Indorayon was formerly majority owned by Singapore-based holding company Asia Pacific Resources International Limited (APRIL), but in 1999 APRIL divested its shares in the troubled mill  to its parent conglomerate Raja Garuda Mas. See APRIL's website http://www.april.com.sg/news0712-1998.htm (retrieved November 25, 2002). Like APP, APRIL is also heavily indebted and also owns a mill in Riau (RAPP) that has been the object of community protests, though not to the degree of APP or Indorayon. Land disputes in Delik village, Riau in 1997, led to clash in which police opened fire on a peaceful demonstration, killing one local farmer. One activist was arrested in the confrontation and jailed for five years for incitement against the government. Marganti Manaloe, Penjaraku: Ironi Penegakan Hak Asasi (Pekanbaru, Riau: Opsi, 2001).

[135] "The IIU Case: Pulp and Paper versus the People," Ekonesia 4: 2, August 1990.

[136] Wahana Lingkungan Lestari Indonesia (WALHI), "Daftar Korban Kekerasan Aparat Militer Damalm Aksi Menutnut Ditututpnya PT IIU, July – November 1998," unpublished document (copy on file at Human Rights Watch), Medan, 1998.

[137] Richard Borsuk, "Toba Pulp to Dismantle Rayon Plant," Asian Wall Street Journal, July 5, 2002.

[138] "Government Suspends Indorayon operation," Jakarta Post,March 20, 1999.

[139] Human Rights Watch interviews with Northern Sumatra environmental activist, Jakarta, February 19, 2002; with private security expert, Jakarta, February 11, 2002.

[140] Tom Bannikoff, "Old Troubles, New Rules," AsiaWeek, November 13, 1998; Apriadi Gunawan, "Indonesian decision to permit Indorayon to reopen sparks protests," Jakarta Post, May 29, 2002; and "Over 5000 protest the reopening of Indorayon," JakartaPost, June 11, 2002.

[141] "16 protesters held, 500 flee over Indonesian plan to reopen pulp plant," Agence France Presse, November 24, 2002.

[142] Human Rights Watch interviews with private security firms in Jakarta, January 28, 2002, February 11, 2002; in Pekanbaru Riau, February 7, 2002; in Pangkalan Kerinici Riau, February 15, 2002.

[143]PamSwakarsa is a term that came into wide circulation as the name for civilian security units formed by the police to protect special parliamentary sessions in Jakarta, but is now often used generically for civilian security.

[144] Human Rights Watch interviews with Indah Kiat and Arara Abadi field staff, Perawang mill site, February 15, 2002.

[145] Brimob, the Mobile Police Brigade, is the elite police special force trained to mobilize quickly to deal with emergencies and especially mass demonstrations and riots. Although the police were administratively separated from the armed forces in 1999 in an attempt to civilianize the police force, since that time, Brimob has become the military arm of the police and has earned itself a reputation, particularly in Papua and Aceh, as the most brutal security force in the country. Brimob has been implicated in extra-judicial executions, torture, disappearances, and collective punishment in addition to violent suppression of freedoms of expression, assembly and association. See Human Rights Watch, "The War in Aceh," A Human Rights Watch  Report, vol. 13 no. 4 (C), August 2001; and "Violence and Political Impasse in Papua," A Human Rights Watch Report,  vol. 13 no. 2 (C), July 2001.

[146] Human Rights Watch interview with Brimob Assistant to the Commissioner, Pekanbaru, February 19, 2002.

[147]However, APP officials complained to Human Rights Watch that the police were frequently unresponsive to their requests for assistance. Human Rights Watch interviews with APP and Arara Abadi central staff, Tanggerang, February 13, 2002; with APP/Indah Kiat and Arara Abadi field staff, Indah Kiat mill site, Perawang, Riau, February 14, 2002.

[148] Human Rights Watch interviews with Tumpal S. and Rasyim N.A. (Director and Deputy Director of Arara Abadi Security and Risk Management Division), Perawang, Riau, February 14, 2002. Mark Werren (leader of the APP/SMG Sustainability Task Force, and the representative who most often meets with foreign NGOs and journalists) first told Human Rights Watch that the Pam Swakarsa were not armed, but when pressed further replied, "Well, maybe they have makeshift batons of some sort." Rasyim N.A. also initially denied that the Pam Swakarsa were armed in any way but when pressed admitted that they carried "only rattan canes for self-defense." Press photos of Arara Abadi Pam Swakarsa (RiauPos, February 6, 2002, p. 17, on file at Human Rights Watch) verify the large clubs that villagers had described.

[149] The Sakai and Malay are both indigenous to the area and villagers say they have long intermarried. It is sometimes difficult to discern a person's Sakai heritage, as many children of mixed marriages sense the stigma attached to Sakai ethnicity as "backward" and are therefore reluctant to admit Sakai roots. Villages are now hemmed in by pulp and oil palm plantations, and since their establishment, Mandiangin has also experienced demographic change as many settlers from other parts of Sumatra and Java came looking for work as day laborers. These migrants provide the company with a captured labor force that can be easily and cheaply managed as they are dependent on the company. In addition, such a labor force can be mobilized against indigenous claims because they aren't tied to land, and are in desperate need of jobs. One village leader estimates the indigenous inhabitants now make up only about 70 of the total 330 households in Mandiangin. Indigenous leaders report that the settlers did not participate in the logging, the blockade, nor were they the subjects of the attacks.  Due to limited time and Human Rights Watch intention to interview victims of the attacks, only indigenous residents were interviewed.

[150] In the more distant past, Sakai traditionally did not farm rice, but depended on hunting and gathering forest produce in a large expanse of forest territory.

[151] Human Rights Watch interviews with villagers, Mandiangin, January 24, 2002.

[152] Human Rights Watch interviews with APP/SMG staff, Jakarta, February 13, 2002; with Indah Kiat and Arara Abadi staff, Perawang, Riau, February 14, 2002; with Riau Andalan Pulp and Paper staff, Pangkalan Kerinci, Riau, February 15, 2002.

[153] Human Rights Watch interviews with provincial police officers, Pekanbaru, Riau, February 21, 2002; with provincial special Mobile Brigade Police (Brimob), Landogoday (Assistant to the Commissioner), Pekanbaru, Riau,  February 21, 2002.

[154] Human Rights Watch interviews with villagers, Mandiangin, January 24, 2002; Angkasa, January 22, February 17, 2002; Betung January 22, 2002; Beringin February 3, 2002.

[155]Musyawarah Pimpinan Kecamatan

[156] Human Rights Watch interviews with villagers, Mandiangin, January 24, 2002.

[157] Human Rights Watch interviews with villagers, Angkasa, January 22, 2002; Betung, January 22, 2002.

[158] Human Rights Watch interviews with villagers, Mandiangin, January 24, 2002.

[159] Human Rights Watch interviews with villagers, Angkasa, January 22, 2002; February 17, 2002.

[160] Rimba Rokan Lestari is controlled by the large timber company, Surya Dumai, whose 2000 Annual Report (on file at Human Rights Watch) lists Indah Kiat Pulp & Paper as a "purchaser" and Rimba Rokan Lestari as a "related party."

[161] Muhammed Saleh, "Awas Konflik Etnis di Tanah Melayu," Forum Keadilan, Edition 15, July 28, 2002.

[162] Human Rights Watch interviews with villagers, Angkasa, January 22, 2002.

[163] Human Rights Watch interviews with villagers, Mandiangin, January 24, 2002.

[164] APP/Sinar Mas Group statement to Human Rights Watch, February 20, 2002 (see Appendix C).

[165] Human Rights Watch interviews with Mark Werren (Director, Sinar Mas Group Forestry Support Audit), Soebardjo (Director Arara Abadi), AK Agarwal (Vice Director Indah Kiat mill), Tanggerang, February 13, 2002; with field staff Mulyadi Gani (director, partnership division Arara Abadi), Tumpal S. (director of Arara Abadi's security and risk management division), Rasyim NA (deputy director of security and risk management division), Stephanus Andrianto (Arara Abadi public relations division), Hasan (senior director of the Indah Kiat mill), Yunus (public relations division for the mill), Mr. Hong (technical division from the mill).

[166] February 14, 2002.

[167] March 25, 2002; April 29, 2002; May 20, 2002.

[168] A copy of this agreement is on file at Human Rights Watch.

[169] Human Rights Watch interviews with villagers, Mandiangin, January 24, 2002. Human Rights Watch has a copy of this list on file.

[170] Human Rights Watch interviews with villagers, Mandiangin, January 24, 2002.

[171] Human Rights Watch interviews with villagers, Mandiangin, January 24, 2002.

[172] Human Rights Watch interviews with villagers, Mandiangin, January 24, 2002.

[173] Human Rights Watch interviews with villagers, Mandiangin, January 24, 2002.

[174] Human Rights Watch interviews with villagers, Mandiangin, January 24, 2002.

[175] APP correspondence with Human Rights Watch February 20, 2002.

[176] Human Rights Watch interview with Arara Abadi staff at the Indah Kiat mill site, February 14, 2002.

[177] Human Rights Watch interviews with villagers, Mandiangin, January 24, 2002.

[178] Human Rights Watch interviews Human Rights Watch interviews with APP and Arara Abadi central staff, Tanggerang, February 13, 2002.

[179] A copy is on file at Human Rights Watch.

[180] Human Rights Watch interviews with villagers, Angkasa, January 22, February 17, 2002; corroborated by press reports and local NGOs' and parliamentary fact finding missions: "Orang-orang Tersingkir dari Kampungnya," Kompas, August 10, 2001;  the Anti Violence Coalition (Aliansi Kontra Kerkerasan, ANTRAS), "Laporan Tim Investigasi ANTRAS Terhadap Konflik Antara PT Arara Abadi dengan Masyarkat Betung dan Desa Belam Merah" and "Kronologis Kejadian Penyerbuan Pam Swakarsa PT Arara Abadi ke Desa Balam Merah, Angkasa, dan Desa Betung Pada Tanggal 2-3 Pebruauri 2001"; "Laporan Panitia Khusus Dewan Perwakilan Rakyat Daerah Provinsi Riau Tentang Kasus Selat Panjang (Desa Betung, Belam Merah dan Angkasa) dan Arara Abadi" Pekanbaru, June 2001"; Aliansi Peduli Pelalawan (APPEL), Prahara Abadi? Buku Putih Peristiwa Penyerangan Massal Karyawan Pam Swakarsa PT Arara Abadi (Pekanbaru, Riau: APPEL, May 2001); Lembaga Adat Petalangan (LAP), Buku Putih Dosa-dosa PT Arara Abadi Terhadap Masyarakat Petalangan (Pekanbaru, Riau: LAP, 2001).

[181] Human Rights Watch interviews with villagers Angkasa, January 22, 2002.

[182] "RAPP Bantah Beli Kayu Curian," Riau Pos, February 9, 2001.

[183] Human Rights Watch interviews with villagers Angkasa, January 22, 2002; February 17, 2002; corroborated by fact finding investigations by community activist organizations APPEL, Buku Putih; ANTRAS, "Laporan Tim Investigasi ANTRAS"; LAP, Buku Putih; and the provincial parliament investigation report, "Laporan Panitia Khusus."

[184] Human Rights Watch interviews with villagers Angkasa, January 22, 2002; February 17, 2002; corroborated by fact finding investigations by community activist organizations APPEL, Buku Putih; ANTRAS, "Laporan Tim Investigasi ANTRAS"; LAP, Buku Putih; and the provincial parliament investigation report, "Laporan Panitia Khusus."

[185] Stanley, Jamharil and 3 other Arara Abadi managers.

[186] A copy of this document is on file at Human Rights Watch.

[187] Villagers reported that at this meeting Arara Abadi agreed to split the income from the trees on the status quo area 50/50. They reported that a representative from Arara Abadi community relations department, field managers and representatives from the Jakarta office were all present at this meeting, but there was no written statement.

[188] Statement from Arara Abadi, February 20, 2002 (See Appendix C).

[189] Human Rights Watch interview with one of the victims, Betung, January 22, 2002.

[190] Human Rights Watch interview nwith one of the victims, Betung, January 22, 2002.

[191] Human Rights Watch interview with one of the victims, Betung, January 22, 2002; confirmed by fact finding investigations by community activist organizations APPEL, Buku Putih; ANTRAS, "Laporan Tim Investigasi ANTRAS"; LAP, Buku Putih.

[192] Human Rights Watch interview with one of the victims, Betung, January 22, 2002.

[193] Human Rights Watch interview with one of the victims, Betung, January 22, 2002, corroborated by fact finding investigations by community activist organizations APPEL, Buku Putih; LAP, Buku Putih; and press reports: "Families flee after attack by pulp and paper company," Detik, February 5, 2001; "Ratusan Karyawan PT Arara Abadi Serbu Desa Betung," Riau Pos, February 5, 2001; "Main Pentung Di Negeri Betung," Gatra, February 17, 2001; "Serbu Desa, PT AA Panen Kecaman," Riau Pos, February 6, 2001.

[194] Human Rights Watch interview with one of the victims, Betung, January 22, 2002.

[195] APPEL, Buku Putih; ANTRAS, "Laporan Tim Investigasi ANTRAS"; LAP, Buku Putih.

[196] APPEL, Buku Putih; ANTRAS, "Laporan Tim Investigasi ANTRAS"; LAP, Buku Putih.

[197] Human Rights Watch interview with one of the victims, Betung, January 22, 2002.

[198] Human Rights Watch interview with one of the victims, Betung, January 22, 2002.

[199] APPEL, Buku Putih; LAP, Buku Putih.

[200] APPEL, Buku Putih; LAP, Buku Putih.

[201] APPEL, Buku Putih; LAP, Buku Putih.

[202] APP/Sinar Mas Group statement to Human Rights Watch, February 20, 2002 (see Appendix C).

[203] "Polda Didesak Usut Serbuan PT AA," Riau Pos, February 6, 2001.

[204] Human Rights Watch interviews with APPEL activists January 18, 2002; January 19, 2002; January 22, 2002.

[205] Including Vice President Ian Machyar, Didi Harsa, Mulyadi Gani, Stanley, and Dominikus. "Operasional PT AA Dihentikan Sementara," Riau Pos, February 6, 2002.

[206] Human Rights Watch interviews with APPEL activists, Pekanbaru, Riau, January 18, 2002, January 19, 2002, January 22, 2002; and "Belum ada Progres terhadap Tuntuan Kasus PT AA" Riau Pos, February 22, 2001.

[207] Human Rights Watch interviews with APPEL activists, Pekanbaru, Riau, January 18, 2002, January 19, 2002, January 22, 2002.  "Masyarakat Tuntut Bebaskan 52 Warga," Riau Pos, February 8, 2002. "Himaliri Sesalkan Sengeta PT AA," Riau Pos, February 8, 2002.

[208] "APPEL Persoalkan Operasi PT AA," Riau Pos, February 13, 2002.

[209] "Operasional PT AA Dihentikan Sementara," Riau Pos, February 6, 2002.

[210] A copy of the letter drafted following the meeting is on file at Human Rights Watch.

[211] APP/Sinar Mas Group correspondence with Human Rights Watch, February 20, 2002 (see Appendix C).

[212] Human Rights Watch interviews with villagers, Angkasa, January 22, 2002 and February 17, 2002.

[213] Human Rights Watch interviews with villagers, Angkasa, January 22, 2002. See also "PT AA dan Warga Berdamai," RiauPos, January 11, 2002.

[214] Decree of the Forestry Minister Numbers 690/1991, 170/1997, and No.610/Kpts/VI/1993 and Decree of Director General of Forest Utilization No.208/Kpts/IV-Set/1993. Since 1991, forest concessionaries have been required by law to contribute to the "general rural wealth and employment opportunities and village infrastructure" of local communities in and around the concession.  A "Forest Community Development" plan (Pembinaan Masyarkat Desa Hutan) is a required component of the company's Forest Exploitation Work Plan (Rencana Kerja Pengusahaan Hutan/ RKPH), and without this document, the concessionaires' work plan would not be approved by the Ministry bureaucracy.  These programs, called Village Leadership (BinaDesa) and Forest Community Development (Pembangunan Masyarakat Desa Hutan, PMDH), were most often interpreted by the concessionaires as helping villagers with physical infrastructure development (building or "rehabilitating" mosques, permanent--i.e. non-swidden--agriculture demonstration plots, schools, village administration, etc.). See Rita Lindayati, "The Role of Ideas and Institutions in Outer Islands' Social Forestry Policy Development," in Carol J. Pierce Colfer and Ida Aju Pradnja Resosudarmo, eds., Which Way Forward: People, Forests and Policymaking in Indonesia (Washington, D.C.: Resources for the Future, 2002).

[215] AMEC Simmons, "Preliminary Sustainable Wood Supply Assessment," October 12, 2001, p.29.

[216] See note 214 above.

[217] LAP, Buku Putih.

[218] Special Provincial Parliament Fact-finding Team report "Laporan Panitia Khusus Dewan Perwakilan Rakyat Daerah Provinsi Riau Tentang Kasus Selat Panjang (Desa Betung, Belam Merah dan Angkasa) dan Arara Abadi," June 2001.

[219] Governor's Decree SK Gub No. 118/IX/1972, September 18, 1972.

[220] These losses especially embittered local residents. One honey tree can reportedly produce one ton of honey every three months, and can be harvested up to four times a year. Under a regime of fines dictated by local customary law, Arara Abadi was fined Rp6.7 See APPEL, Buku Putih. Before this fine could be paid, Arara Abadi enforcers attacked Betung. According to Tenas Effendi (the traditional head of the Melayu community of Riau and the head of Kerapatan Majelis Kabupatan) and Zulmizan (the head of APPEL) the attack in Betung was not only intended to shut down the donation posts, but also seemed intended to scare and distract community members from making such a large monetary demand. "Polda Didesak Usut Serbuan PT AA," Riau Pos, February 6, 2001.

[221] APPEL, Buku Putih.

[222] Human Rights Watch interview with one of the victims, Betung, January 22, 2002.

[223] Human Rights Watch interviews with villagers in Angkasa and Betung, January 22, 2002; with Yosuf Daeng (legal counsel for Arara Abadi), February 18, 2002; with provincial police and former district police chief, Pekanbaru, Riau, February 19, 2002.

[224] Human Rights Watch interview with villagers, Angkasa January 22, 2002.

[225] "Warga Mandiangin Gugat PT AA Rp2M," Riau Pos, November 21, 2000.

[226] Human Rights Interview with a provincial police official, Pekanbaru, Riau, February 19, 2002.

[227] Human Rights Interview with a provincial police official, Pekanbaru, Riau, February 19, 2002.

[228] Such approaches to violence are a routine government response and have proven to be poor substitutes for legal accountability for crimes and active dispute resolution. Repeated communal clashes in Kalimantan were followed by such "traditional peace ceremonies" as a matter of practice. But locals say they that rather than resolving the conflict, these government performances were even more infuriating to those involved in the conflict as they were seen as a way of avoiding real action. Human Rights Watch, "Communal violence in West Kalimantan," A Human Rights Watch Report, vol. 9 no. 10 (C), December 1, 1997. Communal clashes in West Kalimantan have been a recurring problem, claiming hundreds of lives and displacing thousands.

[229] See also David Brown, "Secrecy in the Indonesian Forest Sector: A Researcher's Experience," in Global Forest Watch, The State of the Forest: Indonesia

[230] Environmental Investigation Agency and Telapak Indonesia, "Illegal Logging in Tanjung Puting National Park," "Timber Trafficking," and "The Final Cut."

[231] Marianne Kearney, "Timber Trader's Thugs Did This To Him," StraitsTimes, March 10, 2001, http://www.ecologyasia.com/NewsArchives/Mar_2002/straitstimes.asia1.com.sg_asia_story_0,1870,107415,00.html (retrieved November 26, 2002).

[232] Environmental Investigation Agency, "Police Ignore Evidence of Illegal Logs," press release, April 30, 2002.

[233] For more on Pemuda Pancasila, see Loren Ryter, "Pemuda Pancasila: The Last Loyalist Free Men of Soeharto's New Order?" in Benedict R. O'G. Anderson, ed., Violence and the State in Soeharto's Indonesia (Ithaca, N.Y.:  Cornell University Press, 2001).

[234] "Anggota LSM KP2MI Dikeroyoki Jagawana," Riau Pos, August 13, 2001.

[235] Indonesia Corruption Watch, "Lifting the Lid on Indonesia's Judicial Mafia," Jakarta, 2002.

[236] Robert Go, "Indonesia's 'Instant Lawyers,'" Straits Times, June 1, 2002.

[237] "U.N. Condemns Indonesia's Justice," Straits Times, July 23, 2002. Justice Minister Yusril Ihza Mahendra lashed out against what he portrayed as inappropriate U.N. political attack against the government and president, and said that Indonesia should not pay too much attention to foreign advice on how to reform their government. "Jakarta Minister slams U.N. judiciary investigator," Reuters, July 23, 2002.

[238] Bob Hasan was sentenced to six years in prison for embezzlement of U.S.$243 million in state funds though a fraudulent aerial mapping survey awarded eleven years ago. "Hasan's sentence triples," Agence France Presse,March 16, 2001.

[239] One newspaper reported that a local Jakarta hospital had recorded 103 people being burned to death in vigilante attacks in the first six months of 2000. Joko E.H. Anwar, "Reforms in Jakarta means license to kill," Jakarta Post, December 30, 2000. Another reported that nationwide reported deaths in vigilante attacks reached 216 in 2001, but that the actual number could be more than double that number. Emmy Fitri, "Street vigilantism continues," Jakarta Post, January 12, 2002. Other officially sanctioned vigilante groups in Central Java have lynched and beheaded strangers suspected of occult or criminal activity. "Lynch mobs rage in East Java after murder suspect's arrest," Agence France Presse,October 26, 199; and "Mob lynches four 'ninja' killers," Straits Times, October 28, 1998.

[240] Federation of American Scientists Intelligence Report, "Indonesia's Militias," http://www.fas.org/irp/world/indonesia/militia.htm, (retrieved October 3, 2002).

[241] The military provides Hansip's training and supplies units with their weaponry. Hansip platoons are established in each village, the members recruited from the village community. The system of Indonesia's National Defense and Security is based on "total people's defense and security" which means that the Armed Forces and the entire people are equally responsible for maintaining national security and defense. The Civil Defense Organization is responsible for matters concerning security and order and has to assist the people in village emergencies. Hansip is under the supervision of the district head and the governor of the province.

[242] Human Rights Watch, "Ban Arms Sales to Indonesia Unless Timor Militias Stopped," press release, August 17, 2000; "East Timor: Suspend Aid Until Militias Brought Under Control," press release, September 1, 1999; "East Timor: Stop Militia Violence," press release, July 6, 1999. See also Brendan Nicholson, "Documents Reveal Indon Terror Link," The Age, May 8, 1999.

[243] In late 1998 minister of defense and security General Wiranto proposed the formation of a civilian militia (Ratih) to help maintain order in the country. However, it did not materialize because it did not receive much support from some segments of the national leadership. Instead, Kamra, civilian paramilitary units, were recruited and trained by the Indonesian army to serve in police auxiliary units. Starting in February 1999 the Indonesian Army began training 40,000 unemployed youths as members of a Kamra to assist police. Each member of Kamra trained for at least trained for two weeks at an educational institution of the Indonesian Army in camps at military area base regiments, with a subsequent three to four months of training "on the job." The civilians are armed with shields, batons, and handcuffs and are authorized to make arrests. The regulation used as the legal basis of the force is Presidential Decree No. 5/1978. After being laid off, the Kamra members later threatened to run amok. "Over 1000 Kamra Members Threaten To Run Amok," Jakarta Post, December 19, 2000; "ABRI to start training 40,000 civilian militia," Jakarta Post, December 24, 1998.

[244] The Pam Swakarsa voluntary militia does not have a clear command under civilian or military hierarchy, has no clear legal basis and received little training. In November 1998 ABRI recruited some 125,000 civilians to bolster the defense of the special legislative session preparing for the 1999 elections. Many of the volunteers were recruited from gangs notorious for violence, and were eventually withdrawn after numerous brawls with demonstrators. Panca Nugraha, "Pam Swakarsa-Solution or New Problem?" Jakarta Post, January 19, 2002.

[245] "Belum Sehari Dilantik, Lansung Tangani Demonstran," Riau Mandiri,February 3, 2002.

[246] "100 Shanties Demolished in Teluk Gong," Jakarta Post, June 24, 2002. Rendi A. Witular, "Jakarta Begins Door-to-Door ID Card Raids," Jakarta Post, January 23, 2002; "Public furious at Tramtib's violence, demand changes," Jakarta Post, January 26, 2002. During a campaign to reduce in-migration to Jakarta civilian militias were involved in attacks against those believed to be non-Jakarta residents during house to house checks of Jakarta ID cards. 

[247] Ainur R. Sophiaan, "Banser told to dump legacy of militarism, mob politics," Jakarta Post, June 8, 2000; "More Harm than Good," Jakarta Post, May 15, 2000; Derwin Pereira, "Muscle Politics in Indonesia," The Straits Times, March 7, 1999.

[248] Jeremy Wagstaff, "Indonesia's PDI Takes on Role of Police," Asian Wall Street Journal, May 26, 1999; Vaudine England, "Militias adjust to free market," South China Morning Post, November 11, 2001.

[249] Greg Fealy. "Inside the Laskar Jihad," Inside Indonesia. January 2001.

[250] F.T. McCarthy.  "Black Bats Strike Back," The Economist, August 11, 2001.

[251] Michael Richardson, "Rights Activists Accuse Jakarta of Stoking Unrest in Irian Jaya," International Herald Tribune, June 19, 2000.

[252] "Fifteen hospitalized after 'rent-a-thug' attack at KomNas Ham," Jakarta Post, March 29, 2002; "Group attacks Indonesian rights protesters, 15 in hospital," Agence France-Presse, March 29, 2002.

[253] "Islam Defenders Front: Rise to Power, Organization and Leadership," Laksamana.net, October 13, 2001, http://laksamana.net/vnews.cfm?ncat=19&news_id=1306 (retrieved November 4, 2002).

[254] Muhammed Saleh "Awas Konflik Etnis di Tanah Melayu," Forum Keadilan, Edition 15, July 28, 2002.                

[255] Human Rights Watch interview, private security expert, Jakarta, January 28, 2002.

[256] Human Rights Watch interviews with Arara Abadi staff at the Indah Kiat mill site in Perawang, Riau, February 14, 2002.

[257] Human Rights Watch interviews with staff of various private security firms working in Riau and elsewhere in Indonesia, January 28, 2002, February 3, 2002, February 7, 2002, February 11, 2002, February 15, 2002.

[258] Universal Declaration of Human Rights, Article 17(2).

[259] See S. James Anaya, Indigenous Peoples in International Law (Oxford University Press:  New York, 1996), p. 104-07.

[260] Indonesia has been a party to the International Convention on the Elimination of All Forms of Racial Discrimination (CERD) since 1999. Committee on the Elimination of Racial Discrimination, General Recommendation XXIII on Indigenous Peoples (Fifty-first session, 1997) U.N. Doc. A/52/18, annex V.

[261] Convention (No. 169) concerning Indigenous and Tribal Peoples in Independent Countries, adopted June 27, 1989, 76th Session of the General Conference of the ILO, entry into force, Sept. 5, 1991, Art. 13(1).

[262] See Anaya, Indigenous Peoples, p. 106.

[263] ILO Convention No. 169, Art. 14.

[264] Ibid., Art. 15.

[265] Ibid., Art. 14(1).

[266] Ibid., Art. 14(2)-(3).

[267] Ibid., Article 7 (1) states, "the peoples concerned shall have the right to decide their own priorities for the process of development as it affects their lives, beliefs, institutions and spiritual well-being and the lands they occupy or otherwise use…In addition, they shall participate in the formulation, implementation and evaluation of plans and programs for national and regional development which may affect them directly."

[268] Ibid., Art. 16.

[269] Ibid., Art. 16.

[270] The legal gazettement of the State Forest Zone is contingent on notification units (BATB) being signed by the Minister of Forestry. As of February 1999, the Ministry's own Forest Inventory and Land Use Planning Unit (Inventarisasi dan Tata Guna Hutan, INTAG) documented that of the 2531 units identified during the 1984 classification process, only 1719 units have been signed, leaving 812 units still legally unclassified. Direktorat Inventarisasi dan Tata Guna Hutan (INTAG), unpublished internal progress report, cited in Chip Fay and Martua Sirait, "Getting the Boundaries Right: Indonesia's Urgent Need to Redefine its Forest Estate," unpublished manuscript, International Center for Agroforestry Research (ICRAF), Bogor, Indonesia, 2001, p.11.

[271]Ministerial Decree No 32/Kpts-II/2001 on the Criteria and Standards for Forest Area Classification.

[272] Chip Fay and Martua Sirait, "Getting the Boundaries Right."

[273] Revised Basic Forestry Law, Article 1, Section 4; also Ministry of Forestry and Estate Crops Decree (SK) No. 32/2000, Article 5, Section 2, Paragraph b (emphasis added). The article does not use the word hakmilik, which specifically indicates "ownership rights" (commonly interpreted to be equivalent to individual freehold property titles), but rather an unqualified hak atas tanah, which refers to the broader idea of "land rights."

[274] Human Rights Watch interview with Mark Werren (Director, Sinar Mas Group Forestry Support Audit), Jakarta, February 13, 2002.

[275] Decree of the Forestry Minister Numbers 690/1991, 170/1997, and No.610/Kpts/VI/1993 and Decree of Director General of Forest Utilization No.208/Kpts/IV-Set/1993. See note 213.

[276] Human Rights Watch interview with Mulyadi Gani, Maj. Gen. (Ret.) Tumpal S., and Rasyim N.A., Perawang, February 14, 2002; with Mark Werren, Jakarta, February 13, 2002.

[277] Human Rights Watch interview with Mulyadi Gani (Field Director, Joint Ventures Division, Arara Abadi), Perawang, February 14, 2002.

[278] APP/Sinar Mas Group communication to Human Rights Watch February 21, 2002.

[279] Human Rights Watch interview with Mark Werren, Jakarta, February 13, 2002.

[280] Ibid.

[281] Ibid.; and Human Rights Watch interview with Indah Kiat and Arara Abadi staff, Perawang, February 14, 2002.

[282] Human Rights Watch telephone interview with Singapore-based financial analyst, September 16, 2002.

[283] International Organization of Standards, http://www.iso.ch/iso/en/ISOOnline.frontpage, (retrieved October 3, 2002). 

One example of ISO standards requires credit cards have a standard format and thickness so they can be used worldwide.

[284] Det Norske Veritas, one of the independent certifying bodies for ISO 14001, used by APP.

 http://www.dnv.com/certification/,  (retrieved October 3, 2002)

[285] Christopher Barr, "Profits on Paper: The Political Economy of Fiber, Finance, and Debt in Indonesia's Pulp and Paper Sector," draft report released by Center for International Forestry Research (CIFOR) and WWF's Macroeconomics Program Office, November 28, 2000. This report was later included as a chapter in Barr's Banking on Sustainability, published in October 2001.

[286] Edward Mathews and Jan Wilhelm Van Gelder, "Paper Tiger, Hidden Dragons," Friends of the Earth--England, Wales, Northern Ireland, London, 2001.

[287] Paul Brown, Steven Morris, and John Aglionby, "Rainforests Hit By Paper Trail to UK," The Guardian, June 26, 2001; Paul Brown and John Aglionby, "British Money Fuels Cycle of Debt and Destruction," The Guardian, June 26, 2001; Steven Morris, "Offices, Schools, Hospitals at the End of Paper Tail from Diminishing Forests," The Guardian, June 26, 2001; John Aglionby, "Fishermen Driven to Illegal Logging As Pulp Factory Poisons River," The Guardian, June 26, 2001.

[288] See Sara Webb, "APP Orders Study to Gauge Damage to Environment," Asian Wall Street Journal, September 12, 2001; Sara Webb, "Audit Questions APP's Future Access to Cheap Wood," Asian Wall Street Journal, December 7, 2001.

[289] For example, a cursory conversation with a single fisherman encountered at the mill jetty was used to conclude that the productivity of fish stocks near the mill remains high and the environmental impact on the water quality is negligible (AMEC Simons, "Preliminary Assessment," p. 25). Likewise, a local leader who was "introduced to the auditor by a Indah Kiat public relations officer" concluded that it was not true that local people were not hired by the company, rather that "often a local candidate has an attitude problem which causes them to fail final selection." (AMEC Simons, "Preliminary Assessment," p 26).

[290] However, reportedly, the sites for review are to be chosen by APP/Sinar Mas Group, not by the reviewers themselves.

[291] Human Rights Watch interview with Mark Werren, Jakarta, February 13, 2002.

[292] World Bank, 2002 Data and Statistics, http://www.worldbank.org/data/countryclass/classgroups.htm (retrieved October 3, 2002).

[293]Paulo Mauro, Why worry about corruption? (Washington, D.C.: The International Monetary Fund, 1997); Ved P. Ghandi, The IMF and the Environment (Washington, D.C.: IMF, 1998); and "Factsheet on the IMF and the Environment," IMF, August 2, 2002, http://www.imf.org/external/np/exr/facts/enviro.htm (retrieved October 3, 2002). Rampant illegal activity in the forest sector is an economic drain on state resources. Over-exploitation of forests could compromise the viability of Indonesia's forestry industry and balance of foreign trade, in the next five to ten years according to World Bank estimates of forest availability. At the same time, it will necessitate greater social expenditures as populations become more impoverished, and less self-sufficient in food and fuel production. These circumstances make a strong economic argument for IMF to use its influence to improve sustainability in the forest sector.

[294] "Factsheet: IMF and the Environment";  "Review of the Fund's Experience in Governance Issues," IMF Policy Development and Review Department, March 28, 2001, http://www.imf.org/external/np/gov/2001/eng/report.htm (retrieved October 3, 2002).

[295] On the D.R. of Congo, see U.N. Security Council Addendum to the Panel of Experts on the Illegal Exploitation of Natural Resources and Other Forms of Wealth in the Democratic Republic of Congo, November 1, 2001, which called for a review and renegotiation of concessions for extraction of timber, gold, diamonds, coltan, cobalt, and oil, and a moratorium on the trade and importing of these commodities originating in areas under control of foreign troops or rebel forces, and introduced the idea of sanctions should there be no progress in the exploitation of these resource sectors. On Liberia, UN Security Council Resolution No.1408, paragraph 10, adopted on May 6, 2002. In passing this resolution, the Security Council built on success in the Kimberley Process in tracking trade of so-called "conflict diamonds" to control the flow of this money to arms trade, and in bringing to international attention the role of illicit trade in directly contributing to violent conflict in the region and highlighted the responsibility of private sector actors to judiciously avoid supporting these abuses through their business operations. U.N. General Assembly Resolution A/RES/55/56 on conflict diamonds, http://www.un.org/peace/africa/Diamond.html (retrieved October 3, 2002).

[296]IMF Policy Development and Review Department, "A Review of the Fund's Experience in Governance Issues," http://www.imf.org/external/np/gov/2001/eng/report.htm (retrieved November 4, 2002). The IMF and Consultative Group based their view that firm action on reform was needed only due to the economic losses from uncollected taxes and fees from illegal logging, but overall effects of the illicit activities. The Policy review document states, "The logging activities undermined the implementation of environmentally sound and sustainable forest management. Notwithstanding generally good economic performance, the absence of good forestry policy was considered to put in doubt the medium term sustainability of the fiscal and external position…The incidents of corruption, in addition to threatening the successful implementation of the program, also put in doubt the purpose of the use of the Fund resources. Given the seriousness of the incidents, continued support would have damaged the credibility of the Fund." Well-placed observers told Human Rights Watch that while donor support was initially crucial in getting Cambodia's forestry reform program off the ground, in recent years flagging donor support for meaningful reforms has meant that the audits and monitoring have been largely cosmetic.  See also, Michael Richardson,  "Illegal logging topples Cambodia's Forests," International Herald Tribune, June 21, 2002. Global Witness has been contracted by the U.N. to undertake a scoping study in Cameroon to determine if a similar model for independent monitoring of forests would be applicable.

[297] Global Witness, "At long last Cambodia suspends all logging operations," press release, December 12, 2001.

[298] World Commission on Forests and Sustainable Development, Our Forests Our Future (Cambridge, U.K.: Cambridge University Press, 1999). Arnoldo Contreras-Hermosilla, "Law Compliance in the Forest Sector: An Overview," Working Paper 37205, World Bank Institute, Washington, D.C., 2002.

[299] John Keating, Director of The E.U.-Indonesia Liaison Bureau in Jakarta, "New Hope for Indonesia's Forests," Jakarta Post,February 2, 2000.

[300] E.U. statements to the Paris Club in July 1999; to the tenth CGI in Tokyo, October 17, 2000; to the Interim CGI in Jakarta, April 23, 2001 (all on file at Human Rights Watch).

[301] E.U. Commission for the Interim CGI, "Policy Dialog for the Creation of a Conducive Environment for Sustainable Management of all Types of Forest in Indonesia," position paper presented the Interim CGI meeting in Jakarta, April 23, 2001 (on file at Human Rights Watch).

[302] World Bank Operations Evaluation Division, "Forestry: The World Bank's Experience," Washington, D.C., 1991. The World Bank's own assessment of its Country Assistance Programs found that from 1992-1999, 100 percent had unsatisfactory monitoring and evaluation. In stakeholder participation, 70 percent of the projects were found to be unsatisfactory. "A Revised Forest Strategy for the World Bank Group," draft for Public Comment May 14, 2002, Appendix 9.13, http://lnweb18.worldbank.org/ESSD/essdext.nsf/14DocByUnid/403A34FDD7B9E84A85256BD00077D91B/$FILE/ForestSectorStrategyEntireDocument.pdf  (retrieved October 3, 2002).

[303] World Bank, "A Revised Forest Strategy for the World Bank Group."

[304] See Human Rights Watch, "Landmark Indigenous Land Rights Case to Be Heard in Ratanakiri Court," press backgrounder, January 25, 2001; "The Oil Diagnostic in Angola: an Update" press backgrounder, March 1, 2001; "The International Monetary Fund's Staff Monitoring Program for Angola: The Human Rights Implications," press backgrounder, April 1, 2000; "The Price of Oil: Corporate Responsibility and Human Rights Violations in Nigeria's Oil Producing Communities," A Human Rights Watch Report, vol. 22, no. 54, January 1999; and "The Three Gorges Dam in China: Forced Resettlement, Suppression of Dissent and Labor Rights Concerns," A Human Rights Watch Report, vol. 7, no. 2, February 1995. For more on oil, violence and religion in the Sudan, see International Crisis Group, "God, Oil and Country," Brussels, January 2002; and Amnesty International, "Sudan: The Human Price of Oil," London, May 2000. On diamonds and war in Angola, see Global Witness, "A Rough Trade," London, December 1998; and Partnership Africa Canada, "The Heart of the Matter: Diamonds, Sierra Leone and Human Security," January 2000. On violence around the logging industry in the Philippines, see Human Rights Watch, "The Philippines: Human Rights and Forest Management in the 1990s," A Human Rights Watch Report, vol. 8, no. 3 (C), April 1996. On relocations of indigenous villagers for the construction of the Narmada Dam in India, see Asia Watch (now Human Rights Watch/Asia), "Before the Deluge: Human Rights Abuses at India's Narmada Dam," A Human Rights Watch Report, vol. 4, no. 15, June 1992. See also Michael Ross, "Extractive Sectors and the Poor," Oxfam International, Boston, 2001.

[305] See for example Mauro, Why worry about corruption?; Vito Tanzi and Hamid Davoodi, Roads to Nowhere: How Corruption in Public Investment Hurts Growth (Washington, D.C.: IMF, 1998); IMF, Good governance: The IMF's Role (Washington, D.C.: IMF, 1997); Thomas Wolf and Emine Gurgen,  Improving Governance and Fighting Corruption in the Baltic and CIS Countries: The Role of the IMF (Washington, D.C.: IMF, 2000).

[306] U.S.$600 million estimate from Mark Baird, Indonesia country director for the World Bank, "Forest Crime as a Constraint to Economic Development in East Asia," presented at the Forest Leadership and Law Enforcement Conference, Bali, September 2001,

http://wbln0018.worldbank.org/eap/eap.nsf/Attachments/FLEG_S8-2/$File/8+2+Mark+Baird+-+Indonesia,+WB.pdf (retrieved October 3, 2002). The U.S.$3.5 billion estimate comes from the World Commission on Forests and Sustainable Development, Our Forests Our Future. (Cambridge, U.K.: Cambridge University Press, 1999) and Arnoldo Contreras-Hermosilla, "Law Compliance in the Forest Sector: An Overview" Working Paper 3720, World Bank Institute, Washington, D.C., 2002.

[307] Baird, "Forest Crime."

[308] Original on file with Human Rights Watch.

Region / Country