Trillions of rupiah has been lost from state coffers as a direct result of corruption and mismanagement in the forestry sector, a leading graft watchdog has said.
“We estimated the shortfall to forestry revenue in Riau province alone from 2002 to 2006 was Rp 1.855 trillion [$205.9 million],” Anggita Tampubolon, a researcher at Indonesia Corruption Watch, said on Friday.
This translates to average annual losses in Riau of Rp 371 billion over the period.
ICW based its calculation on comparisons between official deforestation estimates and production estimates.
Firdaus Ilyas, budget analysis monitoring coordinator for ICW, said the potential losses across the nation were far greater.
“This data comes from just one province,” he said, “and could be duplicated across the country.”
ICW’s finding eclipses recent research by the Supreme Audit Agency (BPK) said losses from Riau’s forestry sector between 2008 and 2009 amounted to Rp 491 million.
The audit factored in illegal mining in forests, unauthorized issuance of concessions, zoning violations, underreporting of forestry earnings, failure to collect on those earnings and embezzlement.
To combat graft, ICW recommended an overhaul of policy to grant concessions, greater transparency in forestry earnings, improved revenue collection and more stringent law enforcement.
“The government needs to seriously follow up on reports like the BPK’s or from local communities,” Firdaus said.
Meanwhile, Wirendro Sumargo, executive director of Forest Watch Indonesia, said ICW’s report did not take into account the vast losses on top of the shortfall to state coffers.
“The ecological cost itself is much higher than that — about Rp 2 trillion,” he said. “You need to take into account the environmental services or biodiversity lost as well.”
Wirendro said combating corruption in the sector would not be easy. “It won’t be apparent on the perpetrators’ bank accounts because of the nature of how they work,” he said. “Most perpetrators just get an administrative slap on the wrist and never face corruption charges.”
ICW’s Anggita acknowledged the difficulty, but said the BPK’s audit opened the way for strong action to be taken. “The audit revealed losses to the state, and under the corruption law that’s grounds for prosecution,” she said.