INDONESIA - ILLEGAL LOGGING MOU PROJECT PROPOSALS

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SUBJECT: INDONESIA - ILLEGAL LOGGING MOU PROJECT PROPOSALS


1. (SBU) Summary: Embassy Jakarta's Illegal Logging Task Force
recommends Washington agencies divide the $1 million in proposed
State Department ESF funds under the U.S.-Indonesia illegal logging
MOU between the following three activities:

--$550,000 for the enhancement of an existing DOJ-ICITAP project
with the Indonesian Marine Police to provide specific illegal
logging related training and support what could lead to high-profile
and deterrent level interdictions, seizures and arrests at ports and
at sea.

--$200,000 to support U.S. Forest Service (USFS) collaboration with
the Indonesian Ministry of Forestry (MOF) to educate the public and
other GOI agencies about the country's new timber and forest
legality standard, and assist the Ministry in developing its own
management structures and operational procedures to implement it.

--$250,000 to assist the MOF in planning field tests of its new
technology-based log administration system, revenue administration
system, and timber traceability system in eight logging concessions
in Kalimantan and Sumatra.

We believe support for these three projects would best complement
and leverage existing efforts, produce tangible results, and signal
strong USG resolve to help combat illegal logging. End Summary.

High Stakes
--------------


2. (U) Rampant and unchecked illegal logging continues at an
alarming pace throughout Indonesia. At current rates of
deforestation, most experts believe Indonesia's remaining 60 million
hectares of forest will disappear in 20 years. Effectively
combating illegal logging across Indonesia's thousands of islands
and vast territory is a daunting challenge. It will involve a
complex array of political and economic forces, including the
military, police, and local governments. There is an equally
complex international component representing the demand for products
made from Indonesian timber. At the central government level alone,
more than a dozen ministries and agencies have some formal
responsibility for combating illegal logging.


3. (U) In the past two months, the USG has made two well-publicized
commitments to assist the Government of Indonesia (GOI) in combating
illegal logging. On November 13, 2006, the USFS and MOF signed a
Letter of Intent (LOI) to develop technical cooperation in
sustainable forestry management that will promote the protection,
conservation, and sustainable use of forest resources and strengthen
such capacity and capability within Indonesia. On November 17, the
U.S. Trade Representative (USTR) and the Indonesian Ministers of
Trade and Forestry signed a Memorandum of Understanding (MOU) on
Illegal Logging and Associated Trade. The MOU constitutes the first
such agreement for the U.S., a point noted frequently by both
governments, other interested parties, and the press following its
signing. With the U.S. showing a greater commitment to addressing
this issue, expectations are high. Given the relatively limited
funds available to implement the MOU, it will be crucial to choose
for funding activities that leverage as effectively as possible
actual deterrent results and enhance perceptions of the USG
commitment to the issue.


4. (SBU) In this context, Embassy Jakarta's Illegal Logging Task
Force recommends dividing the proposed $1 million in State
Department ESF funds to support the illegal logging MOU between the
three projects described below. We believe the three activities
complement each other very well, and also have the benefit of
leveraging additional existing anti-illegal logging projects, both
of the USG and other donors.

DOJ-ICITAP Marine Police Project
--------------


5. (SBU) DOJ-ICITAP is currently implementing a large scale law
enforcement capacity building and assistance project for the
Indonesian Marine Police (IMP). The project serves as the
cornerstone of our maritime security efforts with the GOI, and
includes the provision of 15 high-speed shore patrol vessels to
conduct surveillance and interdictions in strategic waterways in the
Straits of Malaka and North Sulawesi Sea. As part of the project,

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DOJ-ICITAP is training four IMP operational units in investigation,
policy, and operational procedures. These units now have round the
clock operational capacity to patrol high traffic coastal areas and
interdict suspicious vehicles, including those involved in illegal
fishing and trade in illegal logs and timber. Thus far, the
DOJ-ICITAP project has supported a 300 percent increase in INP
maritime seizures and criminal cases filings.


6. (SBU) Among its recent successes, the IMP has interdicted and
seized significant quantities of illegal timber, processed lumber
and oil. These seizures have received considerable play in local
press and have added a new element of risk to illegal timber and
lumber traders. Part of the IMP's success is due to the
vulnerability of these shipments while at sea, where they are
outside the reach of the complex network of powerful local interests
(local politicians, military and police, and private businesses) who
support illegal logging on land.


7. (SBU) To strengthen the IMP's capacity to combat illegal timber
and lumber trade, we recommend enhancing the DOJ-ICITAP project with
an additional US$ 550,000 in ESF funding. The additional resources
would support specific trainings for the four IMP operational units
on combating illegal logging; develop a network of cooperation and
information sharing between IMP, other GOI agencies, and NGOs; and
seek to collaborate with a proposed World Bank law enforcement
project aimed at arresting and prosecuting Indonesia's known illegal
logging kingpins. Some of the training could specifically focus on
ramin identification, a valuable species of hardwood both countries
recognize as endangered under CITES. Such training would contribute
substantially to efforts coordinated through the existing ASEAN
Wildlife Enforcement Network, which focuses on fauna but is mandated
to coordinate SE Asia enforcement efforts for all CITES listed
species.


8. (SBU) Funding a specific, anti-illegal logging component for
DOJ-ICITAP's IMP project would enable us to make a meaningful
contribution in the area of law enforcement -- arguably the most
challenging area in combating illegal logging in Indonesia.
DOJ-ICITAP is a member of the Embassy's Illegal Logging Task Force
and is currently exploring collaboration with the Nature Conservancy
on raising awareness with the IMP about Indonesia's new legality
standard.

USFS Support to Implement Legality Standard
--------------


9. (U) With support from USAID grantee The Nature Conservancy (TNC)
and a local environmental NGO Lembaga Ekolabel Indonesia, the MOF is
on the brink of formalizing a log and forest legality standard for
Indonesia. Once the standard is in place, the MOF will require
assistance to educate the public and other GOI agencies about the
standard and to develop its own management structures and
operational procedures to implement it. The USFS has invaluable
expertise in these areas that it could share with the MOF and others
through short-term TDY consulting assignments and training programs.



10. (U) Such an activity would fit well with the USFS's commitment
in its Letter of Intent to develop activities supporting
legislative, administrative, and public outreach aspects of forest
resource management; strengthening processes for forest governance
and transparency; and building capacity at all levels and improved
field operations. Equally importantly, resuming direct cooperation
with the MOF would also signal U.S. commitment to implement the
broader MOU. USFS trainings could be tailored to support
DOJ-ICITAP's complementary work with the IMP. USFS assistance would
also build on TNC's progress to date and complement its future
regional efforts.


11. (U) (Note: USAID/Indonesia funding for the TNC ends in March

2007. With funding from the USAID Bangkok Regional Mission, TNC's
new Responsible Asia Forestry and Trade (RAFT) project will take the
lessons learned from efforts in Indonesia and expand them
regionally. The project will promote responsible timber trade and
sustainable management of forest resources and biodiversity in Asia,
with a focus on Indonesia, Malaysia, Vietnam, Cambodia, Lao PDR,
Singapore, Papua New Guinea, plus Japan, China and the United
States. End Note.)


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Operationalize Timber Legality Standard
--------------


12. (U) The MOF is planning to field test its new legality standard,
technologically based log administration system, revenue
administration system, and timber traceability system in eight
concessions - five in East Kalimantan, two in West Kalimantan, and
one in Riau, Sumatra. The MOF and the World Resources Institute are
also digitally mapping and placing in a geographic information
system all forest and plantation concessions and, soon, saw and pulp
mill operations.


13. (U) The MOF requires assistance to establish and implement
procedures to share critical information internally as well as
improve communication with law enforcement agencies. These
procedures would be field-tested in the eight concessions identified
by the MOF. We believe that USFS expertise would be invaluable in
assisting the MOF in this area, and would track with the USFS's
commitment to help MOF improve the use, communication and sharing of
technical information related to commercial forest resources. We
recommend providing $250,000 to USFS to support this initiative.
Supporting field-based work within a limited number of concessions
would complement the other projects proposed through information
sharing to curb illegal logging.
ANDERSON