ENVIRONMENTAL DEGRADATION CONTINUES IN SOUTH

UNCLAS SECTION 01 OF 02 JAKARTA 011930 SIPDIS SIPDIS DEPT FOR EAP/IET, OES/IET, AND OES/ETC E.O. 12958: N/A TAGS: SENV TPHY TBIO EINV ID SUBJECT: ENVIRONMENTAL DEGRADATION CONTINUES IN SOUTH KALIMANTAN ¶1. (SBU) Summary: Although South Kalimantan's legal forest products industry has suffered a sharp decline, illegal mining and logging continue to degrade the province's environment. Overlapping and conflicting central and provincial government responsibilities and a lack of local resources compound the problem, although police in the province have had some success in prosecuting illegal miners and loggers. With few realistic development alternatives, local governments in the province continue to encourage investment in both mining and plantations to better use idle land and create jobs. End Summary. ¶2. (U) We made a September 18-20 swing through South Kalimantan province to assess the degree of illegal mining and logging in the area and assess the province's response to avian influenza (AI). South Kalimantan Province is the smallest of four provinces in Kalimantan, and occupies both river and swamp territories. It has three million people living in 11 regencies and two cities. The province's capital, Banjarmasin, is the largest city with a population of 540,000). The province's per capita income is only $692 per year in 2004, far below Indonesia's average per capita GDP of $1,140 (World Bank, 2004) and $1,280 (World Bank, 2006). The leading economic sectors are agriculture, mining and industry (mostly forest products),contributing 22, 18 and 17 percent to provincial production respectively. FOREST LOSS LEADS TO EMPLOYMENT DECLINE -------------- ¶3. (U) According to local government officials, the forest products industry dominated the economy of South Kalimantan through the late 1990s. However, after years of forest exploitation, the wood industry collapsed in 2000 due to inadequate sources of raw materials, and only small saw mills and limited forest concessions operate today. The province has no remaining significant original tropical forests, with the exception of an area close to Meratus Mountain. Even among the limited remaining forests, the authorities are unable to control illegal logging and fires. During our visit, a forest fire erupted in a protected area. The authorities let the fire burn itself out rather than attempting to contain the flames due to a lack of equipment and firefighting staff. Deforestation also has resulted in significant job loss in the province and contributed to a massive landslide in the area in 2005 that killed more than 20 people. ¶4. (U) In an effort to repair some of the environmental damage, the Ministry of Forestry has cooperated with Japanese NGOs and private companies to reforest 300 hectares (741 acres) along the banks of the Barito River. We also visited a state-owned acacia plantation, used primarily for paper and pulp products, that operates in once deforested land. The plantation is now sustainable, with lands rotated for tree planting and tree harvesting on a scheduled basis. According to the concession owners, animals are returning to the area after leaving following the destruction of the original forests. ¶5. (SBU) According to Governor Dr. H. Rudy Ariffin, with the closure of saw mills in 2000, the government began to encourage investment in mining (coal, diamond, gold, nickel, iron ore, quartz, sand, and lime stone) and plantations (palm oil, rubber, coconut, coffee, sugar palm and cinnamon bark) to help create jobs. Ariffin explained that while mining requires different skills than those used in the wood industry, the plantations are able to utilize effectively former wood industry workers. COMBATTING ILLEGAL ENVIRONMENTAL ACTIVITIES -------------- ¶6. (SBU) Police and local government officials in Banjarmasin reported that increased mining and agricultural activity is contributing to environmental degradation in the province. South Kalimantan's Head of Police, Brigadier General Halba R. Nugroho, described the challenges involved in combating illegal mining and associated crimes, including the convening of unlawful protest rallies, the creation of illicit road blockades, and the development of various shakedown schemes. He identified three factors fueling illegal mining in the province: JAKARTA 00011930 002 OF 002 --Overlapping and conflicting central and local government responsibilities that lead to inappropriate issuance of permits, misuse of authorizations, and overlapping concession areas. Poor regulation of the sector also presents relatively easy opportunities for permit forgery, illegal purchasing, embezzlement, fraud and corruption; -- A 15% disparity between the market fuel prices legal mining companies pay and the subsidized fuel illegal miners can buy on the black market. --Widespread poverty in the community that creates an environment conducive to illegal activities. ¶7. (SBU) Nugroho presented statistics on 65 illegal mining cases the police investigated in 2005 that resulted in 74 arrests. Although prosecutors successfully reached convictions in a number of cases, sentences averaged only three to five months. The short sentences act as a disincentive for robust police enforcement activities. Police data for illegal logging raids are similar. In 2005, the authorities successfully prosecuted 183 cases covering 237 suspects. However, the resulting sentences were limited to prison terms of roughly three to five months. The crimes prosecuted include unlawful cutting and transport of non- documented wood, smuggling, misuse of forest documents, bribery of police and military officials, and manipulating forest production reports. Nugroho requested training for staff to better handle investigations and resources to further expand their operations. ¶8. (SBU) NGO contacts and local forestry officials expressed pessimism about current efforts to protect the environment. Without clearer lines of authority between local and central authorities, increased resources and heavier penalties to more effectively deter criminal activity, these observers believe degradation will only continue. HEFFERN#