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They took our land and we have no way to make a living and nothing to leave our children. What will happen to us? We will become just thieves and gangsters and prostitutes. Before, we used gotong royong [mutual self-help] to assist each other. When people made agreements between one another, we considered it agreed. Now everyone distrusts everyone else, and there is no feeling that law or rights have any meaning.

      -Local village leader, Angkasa

Human Rights Watch's mandate is to protect and advance human rights, and our research and advocacy on environment and corporate responsibility is shaped by these concerns alone. We do not take a position on trade, development policy and lending, or sustainable forest management as such. Rather, we believe that the pursuit of these goals is deeply intertwined with human rights and therefore implies an obligation to avoid abuses.

The extraction of lucrative natural resources - such as oil, diamonds, gold, and timber - is often at the root of the world's most violent conflicts. Looting of valuable resources is a favored tactic of unaccountable governments to pursue power and fund violence. Democratic structures are undermined when governments can hold on to power through violence and patronage networks rather than being accountable to the population. 48

This report has highlighted one example of this nexus between natural resources and human rights. The Malay and Sakai peoples and other people in Riau who depend on forests for their livelihoods are in a precarious position today. Much of their land, long declared to be "state forest" without their informed consent and often without their knowledge, has been seized for forest industry and oil palm concessions, and their traditional livelihood is rapidly disappearing together with the forests. Meaningful legal redress is unavailable to these communities from the Indonesian judicial system. When they directly challenge company practices, they face unaccountable and often brutal militias. These attacks, however, are only the latest turn in a vicious cycle of environmental and social depredation.

The process of forest destruction under the massive pulp and paper sector in Riau has been intimately connected, both in cause and effect, with human rights abuse. The vulnerability and relative powerlessness of villagers today can be traced directly to denial of their civil and political rights at the time community lands were unilaterally designated state property and concessions were granted to large corporate interests affiliated with the Soeharto government. The deprivation of the rights of members of forest dependent communities has directly facilitated the over-expansion of the pulp and paper sector and the destruction of Riau's forest cover. The wholesale destruction of forests, together with the hiring of employees from outside the province, in turn, has made seeking a livelihood increasingly difficult for the forest dependent communities-a violation of their economic and social rights.

Since the fall of Soeharto, changes that have accompanied the "Reform Era," including greater freedom of expression and assembly and vastly improved election processes, have not yet led to any significant improvement. Because the Indonesian legal system remains weak and unresponsive, moreover, there is no end in sight to these abuses. In fact, under current conditions there is good reason to believe that the plight of members of forest-dependent communities will worsen and that deforestation will increase, recent government reform rhetoric notwithstanding. Indeed, because of the massive debt accumulated by the Indonesian forest industry-a perverse cycle in which companies borrowed heavily in international markets on the premise of low-cost expanded output, providing incentives for short sighted forest policies and further marginalization of local communities' rights-there is a strong likelihood of increasing demand for wood and increasing pressure on community land and resource rights. Likewise, as long as private militias and timber gangs can attack with impunity anyone who resists, local residents and activists will continue to live in fear.

It is a truism that those physically closest to a devastated landscape are likely to feel most acutely the effects of that devastation. While there is no guarantee that local people will use resources wisely, when they are denied a role in management and see no possibility for receiving benefit for sound use of forest on lands they claim, there is increased likelihood of the kind of reckless race to log by both local loggers and large corporate interests that leads to wide-scale deforestation.

The Widespread Impact of Impunity
Corruption and impunity lay the foundation for abuses of both human rights and the environment. But it is not only the forests and rights of local forest communities that are the casualties when impunity reigns.

Economic analyses including those by the World Bank and the IMF, have demonstrated that corruption carries high economic costs, crippling national economies through lost revenues and inefficiencies.49 In Indonesia, estimates of government income lost to illegal logging in 2001 ranged from U.S.$600 million to U.S.$ 3.5 billion.50 These inefficiencies have severe social effects. Misallocation and embezzlement of public funds and uncollected taxes and fees mean that less funds are available for social services such as health care, education, public housing, social security and welfare, as well as for reforming basic governance institutions such as electoral and justice systems.

Where there is no effective rule of law, companies are also likely to be vulnerable to extortion, destruction of property, and violence that threaten the security of their personnel and viability of their operations. Unaddressed, this will ultimately endanger Indonesia's economic future. As noted above, the World Bank has argued that lack of rule of law may drive away foreign investment and badly damage the country's economic recovery and future development.51 In Indonesia, what seemed to be strong economic growth built on systemic violation of rights and unregulated and unsound resource management was exposed in 1997 as an impermanent illusion, not a "miracle."

Human Rights Watch believes that the nexus of rights abuse and environmental degradation identified in this report is not an aberration, and that respect for human rights should be recognized as a necessary component of sound, sustainable forestry policies everywhere. For the reasons outlined above, human rights and justice should be integrated, or "mainstreamed," into reform efforts directed at judicial institutions, financial oversight and regulatory bodies, and resource management agencies. This is not to suggest the dilution of specific forms of institutional expertise or mandates, but rather the increased awareness of a need for attention to human rights as a necessary part of improved governance.

48 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.

49 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).

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

51 Baird, "Forest Crime."

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