Global Policy Forum

Exploitation of Indonesia's vast natural resources is spinning out of control, with illegal operations damaging the environment and societies in ways that increase the risk of ethnic conflict, a report by a conflict resolution group said today.

The report, by the Brussels-based International Crisis Group, said that since the downfall of the military government of President Suharto in 1998, there had been an increase in illegal logging, mining and fishing as various parties struggled for control of those lucrative trades.

Illegal activities are protected and in some case organized by bureaucrats and the security forces, with the military and police organizations deeply involved in illegal logging, the report said.

"The exploitation of Indonesia's natural resources is running out of control," the report said. "In the case of logging, the problem is so serious that it threatens to destroy some of Indonesia's largest forests within a decade."

But the report also saw scattered signs of hope for the logging industry.

It recommended that international donors to Indonesia consider linking future aid and loans to the curbing of illegal exploitation if vested interests continued to blocking reform.

Industries like logging and mining were dominated by companies with strong political connections during Mr. Suharto's three decades of autocratic rule.

With the backing of powerful patrons in Jakarta, those companies paid little heed to the environment or local peoples, stoking resentment that has periodically erupted into violence.

The report said that while not the ultimate cause, timber felling in Central Kalimantan Province had combined with the lack of respect for local communities to create conditions for clashes earlier this year in which indigenous Dayaks fought with Madurese settlers from an island off Java, leaving about 500 people dead.

The report said deforestation of Kalimantan since the 1970's had created frustration and anger among the Dayaks, who had previously lived in the forests, while the growth of the timber industry there had attracted migrants from across Indonesia.

The Madurese were the main victims of the violence, part of periodic ethnic clashes that have haunted some areas of Indonesia since it plunged into economic crisis four years ago.

"There is a risk that the current struggle to control natural resources could also lead to conflicts," the report said.

Citing figures from the United Nations, the crisis resolution group reported that Indonesia had the world's third-largest expanse of tropical forest, after Brazil and Congo, but that it was shrinking rapidly.

Precise figures on total forest area were not available. Large deposits of copper, gold, tin, coal and nickel dot Indonesia, and companies often complain of illegal mining. Rampant illegal mining of tin recently prompted the government-run corporation PT Timah, the world's largest integrated tin producer, to warn that it might not survive much longer.

The crisis group's report said graft and apathy ran deep among some bureaucrats responsible for regulating resource use, while profits drawn from the trade were an important source of money for the security forces. "The Indonesian military and police are deeply involved in illegal logging," the report said.

Asked about the accusations, a police spokesman, Brig. Gen. Saleh Saaf said police elements might be involved in illegal logging, adding that operations to crack down on the trade were often constrained because of lack of money.

The scattered signs of hope include a firmer line taken by the Department of Forestry against illegal loggers and the dedication to the cause of some private organizations.

But the report said that while reform-minded officials had begun winning victories, against illegal loggers in particular, the problem was huge, with the biggest obstacle probably graft.

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