Apr 21, 2006

Forest Property Right in Indonesia: Introduction

Forest has been acknowledged as state property right in Indonesia since Dutch colonial era in the early 19th century (McCarthy 2000b). It was based on forest destruction that happened in Java in 1808 hence colonial bureaucracy would manage trees, land and labor. In that era, land was made available for sugar, tea, rubber and coffee production. Colonial authority was also encouraging private investment in agriculture plantation. Agrarian act of 1870 thus facilitated this by taking all land that were not certified under state property right. After Indonesia independence, the important standpoint is in 1967 where Foreign Investment Act no.1 and Forest Law No.5 were passed, enabling the large-scale exploitation of forest resource (Peluso and Harwell, 2001; McCarthy 2000a, 2000b). The law stated in article 5 that all forest in Indonesia territory including resources upon it are belong to the state. State is also given authority to confirm and control planning, functioning, supplies and utilizing forest on condition that give benefit to citizens and state[1]. Under that law, it divided forest area into land use categories stand for objectives of timber production, conversion to agriculture and forest conservation. To emphasized state control over forest, there were series of forest mapping exercise[2]. Government then produced forest land use plan (TGHK) which comprises of areas such as protection forest, nature conservation area, production forest, limited production forest, conversion forest and area for other uses. In area mapped as production or limited production forest, concession is given over 35 years under supervision of ministry of forestry (MoF). The essay is proposed to answer central question on how state based property right is representing agrarian change?. From the two different point of view, new-institutional and class-based theory would be employed in order to understand and explain the central question. Each of theory would address different problems from the same reality. Under new institutional approach, the problem focus on what would lead concession holder to internalize moral hazard? In the other hand class-based approach would deal with how will state-based property right lead to process of landlessness? The paper would arrange and present the analysis in three parts, first, explanation of change under new-institutional theory and followed by class-based approach on state property right. Second, to compare both two theories in explaining the question in term of its contrast and similarities, strengths and weaknesses between approaches. The analysis would also decide what approach best explaining phenomena despite of its weaknesses. Third, to conclude and answer the problem under particular approach set in part two.

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