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Sustainability of timber extraction and the timber-using industry

Employment in forestry and the timber-using industry

Writing at a time when land settlement was in its boom phase, Burbridge, Dixon, and Soewardi (1981) for Indonesia, and Kumar (1986) for Malaysia, argued that a sustainable forestry industry could support a larger workforce than tree-crop agriculture on a per-hectare basis, when account is also taken of jobs in downstream woodworking industries. Kumar's calculations suggested that, whereas logging alone required three times the area per employee of the rubber and oil-palm industries, the addition of downstream processing brought the area required per employee down to less than that for the agricultural industries. On the other hand, a World Bank study has argued for Indonesia that tree-crop estates are a better employmentgenerating option than even forest plantations, notwithstanding the high density of useable timber in the plantations (World Bank, 1989).

These considerations are largely ignored in the conservationist literature, but the arguments raised become of greater importance as the land-settlement drive has run out of steam and in the light of substantial changes in development policy. In chapter 3, we noted the major growth of the downstream woodworking industry in the Peninsula and Kalimantan that has followed the imposition of bans on log exports; the growth of plywood manufacture in Kalimantan has been of a spectacular order. In Indonesia as a whole, an unofficial estimate puts forestry and timber-manufacturing employment as high as 3.7 million, supporting therefore about 15 million people (The Economist 7755,18 April 1992: 28-30). However accurate these estimates may be, probably not less than one-third of timber industry employment would be in Kalimantan. Small regional sawmills alone were estimated by the newspaper Kompas (20 and 24 October 1989) to employ 200,000 people in Indonesia; Kalimantan must have had at least half of these. Even in Sarawak, employment in the timber industry is about 55,000 in direct timber extraction, plus a larger number in associated tasks (ITTC, 1990).

Emerging criticality: Sabah and the Peninsula

Sabah, where log exports have until recently continued without limitation, already faces a serious crisis. Estimates of the area annually cut over fell from 3,640 km²in 1978 to not more than 2,000 km²a decade later (Malaysian Business, 1 August 1988; Country Profile, 1991). Most remaining timber is now hill forest; estimates of the resource have been declining sharply. In 1989, a Forestry Department study foresaw a drop in productivity by almost an order of magnitude between 1988 and 1998, leading to the prediction that "from 1992 onwards, timber production from natural forest would not be able to meet [even] local demand" (Pang, 1990: 10). The same conclusion is reported by Chai and Yahya Awang (1989). Almost the only timber areas remaining productive in the early 1990s were on the 1 million ha concession of the Yayasan Sabah (Sabah Foundation), the inheritor of most of the land of the earlier monopoly holder, the British North Borneo Company. Although oil and gas may sustain state revenues, serious problems are presented to Sabah in this new situation (Murtedza Mohamed and Ti Teow Chuan, 1991).

Belatedly in the late 1980s there was a serious attempt to develop woodbased industry in Sabah, principally simple sawmilling, by imposing quotas and higher export royalties to restrict log exports. Sawmills and veneer and plywood mills all increased sharply in number. With imposed quotas, log exports fell by over one-half between 1987 and 1990, but logs still composed half of Sabah's timber exports in 1992 (Ghazali, 1993a). Although sawn timber production increased by over 40 per cent during the same period, the total volume of exports fell by almost one-third (Country Profile, 1990; Government of Malaysia, Jabatan Perangkaan, 1990). Yet a comprehensive discussion of logging and related problems, which employed sources to 1988 and even 1989, revealed only that logging was up to four times the (estimated) rate of regeneration (Hurst, 1990: 141). The speed of change from apparent surplus to perceived deficit demonstrates the extraordinary measure of self-delusion about the sustainability of timber extraction that has characterized responsible officials and their publicists. This applies not only in Sabah but throughout the region, even in the Peninsula where warnings that there would be a timber deficit by the 1990s have been voiced for more than 20 years (Malayan Forester, 1967; Malaysian Forester, 1978; Kumar, 1986).

The situation in the Peninsula is less serious than that in Sabah only because of the much greater diversity of the economy. For the timber and timber-using industries it is worse. With the rather belated recognition that the employment- and income-generation capacity of a sustainable and integrated wood-based industry is substantial, earlier plans were enlarged in the mid1980s so as to make this a leading area of industrial growth (MIDA/UNIDO, 1985). With good prices, production expanded and at the end of the 1980s the Peninsula had 681 large sawmills, 43 veneer and plywood mills, and more than 1,200 small woodworking plants, furniture factories and other woodusing enterprises (Country Profile, 1990). But predictions of inadequate supply to meet domestic needs became a reality even before the end of the 1980s. There has been an increasingly severe shortage of timber for the mills, for the building industry, for exporters of sawn timber and plywood, and for the downstream factories (Malaysian Business, 16-30 September 1989; 1-15 August 1990; Country Profile, 1990; Reuters News Service, various dates). Logs are hauled right across the Peninsula to the sawmills, some quality logs are sometimes obtained from Indonesia, and rubberwood has been incorporated as a raw material, thus far on a small scale. The future of the big plans for timber manufacture is, notwithstanding optimism, uncertain and is potentially in conflict with the conservationist goals now formally adopted by the government (Brookfield, 1994b).

Response to crisis in the Peninsula and Sabah

This situation, exacerbated by political difficulties between Sabah and the Malaysian federal government, has had consequences of considerable significance. Since the late-1980s there have been persistent demands for some of the logs exported from Sabah and Sarawak to be exported instead to the Peninsula, to ease growing supply shortages (Vincent, 1988). Because this would involve loss of revenue and necessitate lower prices to compensate for high freight costs, both East Malaysian states have consistently resisted the pressure. In 1990, the federal government used powers acquired through the creation of the Malaysian Timber Industry Development Council to impose substantial export levies on sawn timber, which were intended to subsidize the shipment of logs from East Malaysia to the Peninsula. There was little impact, and increasing pressure was then put on Sabah, which, in 1990, elected a new state government opposed to the federal leadership.

In 1992, there was a "crack-down" on illegal logging in the Peninsula, the existence of which had not been officially admitted. The effect was substantially to reduce supplies to the 670 remaining sawmillers in the Peninsula, forcing many to halt or reduce production, and threatening a number with bankruptcy. In January 1993, the federal government responded to pressure by using its powers to impose a temporary ban on the foreign export of logs from Sabah alone, ostensibly in the interest of sustaining supply to Sabah downstream industries, which were said to be operating at 50 per cent of installed capacity. By April, a number of exporters had obtained exemptions, and the federal ban was abrogated in June. In April, however, the Sabah government imposed its own ban on all log exports, while also increasing the duty on exports of sawn timber. Its economy was already in recession in 1992, unlike those of the Peninsula states, and it was threatened by spokesmen for the federal ruling party with a cut in its subsidies.3 Demands for a Peninsular quota as part of the settlement of this dispute seemed a way out in June, but Peninsular sawmillers were still frustrated in their search for access to Borneo timber (Reuters News Service, various dates between January and June 1993). At the same time, Sabah production continued to depend mainly on relogging of areas already worked in the past, threatening to bring closer a collapse, rather than a decline, in timber output.

Impoverishment to endangerment in Kalimantan and Sarawak

Unlike Sabah and the Peninsula, Kalimantan and Sarawak still have more than half of their forests, but shortages have begun to arise in some parts of Kalimantan. Exploitation, whether for log export in Sarawak or for the woodbased industries in Kalimantan, continues at a very high rate. In Sarawak, log exports have expanded, taking up the market share in Japan, Korea, and Taiwan vacated by Indonesia and increasingly also by Sabah (Asean Focus, 1989; Logging and

Resources, 1989; Sarawak Update, 1990). Using estimates of timber density in relation to data on log production, Hong (1987: 128-129) calculated the area logged between 1963 and 1985 as 28,217 km2, about 30 per cent of the whole forest area. Moreover, 60 per cent of the forest area was under concession in 1984.

Conservationist pressures led indirectly to the commissioning of an external review of the Sarawak timber industry by the International Tropical Timber Organization (ITTO) in 1989. It concluded that (ITTC, 1990: 35):

if harvesting of the hill forests continues as at present (13,000,000 m3/yr +/ ), all primary forests in PFE [permanent forest estate] and State land assumed to be available for timber production, including those of more than 60 per cent slope, would have been harvested in about 11 years. At that time only cutover forests would remain. There could then ensue a sharp decline in yield, employment and revenue until the cutover forests mature.

Meantime, harvest levels reached a record 20 million m3 in 1990. The Sarawak authorities interpreted the report as offering encouragement that sustainable forestry not only can, but will, be achieved (Sarawak Update, 1990; Primack, 1991; Wong Kim Min. 1992). The mission indeed found most of the policies to be good, but their implementation to be very inadequate. Above all, the area cut annually had to be reduced greatly. It concluded (ITTC, 1990: 60) that "utilization and management cannot maintain the forest-based economic structure at its present level and, at the same time, sustain it indefinitely into the future."

Primack (1991) interprets the report and its findings to suggest that a reduction of harvesting levels by at least two-thirds is the only way in which a sustainable industry can be achieved. However, it remains to be seen if a 1993 decision merely to halve production by the mid 1990s will be fully capable of implementation. Commitment to reduce production from 12.3 million m3 in 1991 to 9.5 million m3 in 1993 was said to be at the cost of 10,000 jobs in extraction and 25,000 in related activities, with a loss of state revenue of $US50 million.4 The Economist (7833, 8 October 1993: 30-31) reported the conclusion of local and foreign environmental organizations that, although logging might have been reduced in some parts of Sarawak, total yield had not declined. Production was stated to have risen from 15.4 million m3 in 1990 to 18.8 million m3 in 1992 and, despite cuts said to have "cost 30,000 jobs," was expected to total 16.5 million m3 in 1993.

Dependence on natural regeneration was, until very recently, clearly still the aim in Sarawak. Enrichment and "sylvicultural treatment" of dipterocarp forest are planned for 370 km2, but this contrasts with 2,000 km²in Sabah and 3,931 km²in Peninsular Malaysia (Government of Malaysia, 1991a).5 However in 1993, federal and state authorities were said to be looking for 100,000 ha of secondary forest, used by shifting cultivators, for the planting of fast-growing timber species (Ghazali, 1993b).

The ITTO mission was very doubtful about plans to build a woodworking industry to absorb 50 per cent of the cut by 2000, pointing to market uncertainties; not more than 10 per cent of timber was domestically processed at the beginning of the 1990s (Asean Focus, 1989; Country Profile, 1991). Many problems exist, including lack of infrastructure and the fact that the woodworking mills depend heavily on illegal immigrant labour. There is strong pressure on the state and federal governments to impose more extensive bans on log exports, which are currently applied to only a few species. Sarawak, however, has a government that supports the ruling party at national level, and until now calls for bans have been resisted.

In Kalimantan, the total area forested is calculated to have declined from 72 per cent to 63 per cent between the 1982 RePPProT studies and a 1990 Food and Agriculture Organization (FAO) report (FAO/GOI, 1990).6 Much of what remains is in inaccessible areas and expensive to work. East Kalimantan experienced a drop of almost 16 per cent, the largest decline of the four provinces, partly as a result of the 1982/83 fire. Concern should have been heightened by the MOF/FAO (1991) study, which concluded that, even with enrichment planting and good seedling regeneration, it would be more likely to take 60-70 years, rather than the 35 years envisaged under the "selective logging scheme," for the next crop of timber to be available. This should halve the expectation of sustainable levels of production.

Moreover, as in Sarawak, many concessionaires (or their multiple contractors) do not operate within the rules. Each year they are supposed to cut only in a designated area, but instead there is evidence of haphazard cutting all over the concessions, or the re-logging of parts of them within the 20-year lease period, which remains standard.7 Inadequate marking of boundaries can lead to the felling of protected forest or even of timber belonging to a neighbouring concession. The latter happened in a wellpublicized case in 1991 (Jakarta Post, 17 July 1991; Tempo, 27 July 1991), but the powerful concessionaire was able to avoid the imposed penalty (The Economist 7755, 18 April 1992: 30).

The Indonesian plywood industry, which draws all its raw material from natural forests, has been warned not to exceed an annual capacity of 10 million m3 through the 1990s, otherwise real shortages of raw materials could arise by 2000. Some say this will happen sooner, by the mid-199Os (MOF/FAO, 1991). In fact, shortages of supply to plywood factories have frequently been reported since 1991 (Indonesian Commercial Newsletter, No. 92, 27 January 1992; No. 119, 8 March 1993), although problems of transport rather than of supply might have been the principal caused The rapid growth of the plywood industry has been possible largely because of low local prices for both logs and labour, which has resulted in a cheaper finished product. Such prices have, however, militated against care and efficiency in all stages of the industry. Plywood plants need to improve efficiency - about half of each log used is wasted in the processingbut this means new machinery, which is expensive. Mill workforces could be cut by 25 per cent without loss of production, on the basis of international comparison. Plywood exports, already overtaken by textiles as the most important non-oil commodity, are likely to decline as local demand increases. Threats of boycotts against Indonesia's plywood exports by some European countries and Japan might also affect the industry's future (Indonesian Commercial Newsletter, 27 January 1992; 28 September 1992). The milling of smaller and lower-quality logs is recommended, as well as, conversely, development of some specialization in high-quality veneers, following the pattern of the Peninsula. Most telling is that publications emanating from the government since the end of the 1980s (FAO/GOI, 1990; MOF/FAO, 1991) suggest an increase in the local price of logs and even a partial lifting of the logging ban for high-quality, but highpriced, timber. In June 1992, Indonesia in fact lifted the ban on exports of raw logs - and rattans - but instead imposed heavy export duties on their foreign sale. A leading entrepreneur expects exports to rise further, notwithstanding these problems and all opposition from environmentalists (Reuters News Service, 22 October 1992).

These changes are seen as ways of improving logging conditions and protecting the remaining forests. However, Goodland, Asibey, and Post (1990: 307), following Jantzen (1973), are undoubtedly right in saying that "sustainable use of tropical moist forest perforce means low yield - hence low financial and commercial attraction." The problem is that it also means low employment, and a transition to sustainability, just as continuation of "business as usual," would cause the loss of many livelihoods now dependent on timber. Sustainable utilization, however, would leave some employment intact.

Plantation forestry as a solution?

Timber shortages are clearly either real or in prospect, posing a severe threat to both entrepreneurship and employment. Given a low rate of success with enrichment planting, growing emphasis is now being placed on plantation forestry to ensure future supply. Though some planting was done on a small scale in the 1970s, the first serious effort began in Sabah in 1983, initially with pines. Other fastgrowing exotics are now mainly used, principally Acacia mangium, Paraserianthes falcataria, Gmelina arborea, and, sometimes, Eucalyptus deglupta. The sites are cleared completely, but without destumping; weeding is required until the seedlings have become young trees and developed a shading canopy. The result, however, should be a forest composed entirely of useful timber, with a high rate of production. In the Peninsula, a sustainable yield on a cycle as short as 15 years is anticipated (Johari, 1988). In general, most areas to be employed are among those already heavily degraded by earlier logging.

With the exception of Gmelina arborea, which makes reasonable furniture, the fast-growing timber is suitable only for construction purposes and as pulpwood or as fillers in plywood. In timber-short Sabah, plans for the five years 1991-1995 included 3,200 km²of new forest plantations (Government of Malaysia, 1991a). This is in addition to the large area designated for enrichment planting. It seems likely that much of the new effort will be in areas burned in 1983, 85 per cent of which had been logged (Collins, Sayer, and Whitmore, 1991: 206). By contrast, only 420 km²are planned for the Peninsula, where the principal reliance continues to be placed on tighter forest management. In Sarawak, forest plantations hardly exist, and plans for the five years 1991-1995 included only 200 km2, yet for some badly degraded areas in western and west-central Sarawak they could be a very suitable use of land. We saw in chapter 1 that attempts to plant trees on some kerangas land, after unsuccessful cultivation, have failed.

Indonesia has already stepped up its reforestation efforts using mainly Acacia mangium, with a view to the future establishment of pulp and paper mills. There have been experimental plantings going back more than a decade on one huge concession in East Kalimantan. At Pulau Laut, off the south-east coast, problems of insect infestation and inappropriate varieties have been encountered and overcome. The selective logging system is now termed the "selective logging and planting system" and, in a new move to encourage investment, the government has permitted areas quite separate from the concessions to be leased for plantation forestry for 35year periods (FAO/GOI, 1990). Although reforestation is supposedly practiced on a part of every concession, little has been developed. This is almost everywhere the case, even in the better-managed Peninsula (Sham, 1987: 44).

In Indonesia moreover, a new type of transmigrant settlement, called HTI (Hutan Tanaman Industri)-Trans, aims at supplying 30,000 Javanese families to West Kalimantan as a labour force for the total replanting programme, estimated to cover 300,000 hectares in 1992/93. These workers, who had previously been engaged on twoyear contracts for development of tree-crop settlements, will extend these contracts to work on tree planting. The intention is that they will return to their villages in Java after completing replanting, so that, in effect, a new sort of contract-labour scheme is emerging (Kompas, 28 April 1992). A 1992 workshop on the arrangements for linking transmigration with forest estates was told that the transmigrants would own no land, because they would be located in areas classed as "production forest." They would have the use of a small cultivation plot only (Departemen Transmigrasi, 1992). Such conditions have attracted severe criticism, and the scheme has been described as "timber estate slavery" by one non-governmental organization (Economic and Business Review of Indonesia 5, 7 May 1992: 10).9

Ecological risk in plantation forests

Sabah Softwoods, the pioneer in the region, still regards plantations as highrisk ventures, with a considerable degree of skill required in monitoring and management (Golokin and Cassels, 1988). Moreover, there is risk of disease and pest invasion owing to the narrow genetic base; it is acknowledged that the whole stock of Acacia mangium in Sabah comes from a single Australian parent (Salleh and Hashim, 1982). It has been reported from several sources that up to one-third of Acacia mangium in some plantations is affected by a rot that causes hollow boles, making the timber of no use for any purpose but wood chipping and pulping, and adding to the danger when felling (Hadley and Kartawinata, 1993: 37-38; Hashim, Maziah, and Sheikh, 1991). Apparently that problem is more acute on the Peninsula than in Borneo (N. Turvey, pers. comm.). Most certainly, biodiversity within plantation forests will be extremely low.

Moreover, in areas where drought is a recurrent hazard - Sabah and East and South Kalimantan especially - important questions arise regarding the drought-tolerance of the planted species. Most have little fire resistance, and there is the additional risk that repeated fire could lead to abandonment and conversion of the sites to Imperata cylindrica grassland. Fire risk is most serious where the preexisting vegetation is already grassland, as in areas of South Kalimantan. The grass burns readily in the dry season and, even in normal years, some of the new plantings have already been lost. This risk and the social problems associated with these replantings are discussed in chapter 9.

Conflict of interest and the prospect for change

Conflict of interest in the face of supply limitations

Over the entire region it is now possible that the timber industry, as a whole, supports numbers of people comparable with agriculture in the new settlement areas - both official and spontaneous - that have been carved out of the former forest. More certainly, it supports a minority of its participants at much higher levels of income than are obtainable in any agriculture. The question of the sustainability of this employment is therefore of major importance. Critics continue to assert that unsustainable logging practices are likely to put future timber-related employment in jeopardy, including downstream industrial processing in the urban centres. This is hotly denied by official writers who are also timber entrepreneurs, such as Sarawak politician Wong Kim Min (1992). He maintains that selective forestry, as now reformed and practiced, is entirely sustainable; perhaps surprisingly, he receives the support of no less an authority than Brünig, who contributes an introduction to his book.10 However, we have seen above that sawmills in both Sabah and the Peninsula are already in serious straits.

A major conflict of interest is emerging between those whose primary interest lies in maximizing profits (and rents) from the production of roundwood, sawn timber, or plywood in a context of diversi fied sources, and those whose continued well-being depends on the sustainable supply of timber to the sawmills, plywood mills, and factories. This conflict appears even among the most powerful of the entrepreneurs in Indonesia (The Economist 7755, 18 April 1992: 30). As an unexpressed conflict of interest, it more widely sets contractors and illegal loggers, on the one hand, against the factory workers on the other. It has regional expression, as between the entrepreneurs and authorities in East Malaysia and the Peninsula, now raised to a political level in the case of Sabah. In West Kalimantan, some plywood mills already need to bring in supplementary supplies of logs from Sarawak (Dines Kehutanan, Kalbar, 1990). Moreover, shortages of higher-quality logs will soon be felt in Sumatra, as they already are in the Peninsula, so it is suggested that Kalimantan's mills should begin to diversify their equipment so that they can supply some of Sumatra's needs, and begin at the same time to process lower-quality logs instead of simply sending them to the sawmiller (FAO/GOI, 1990).

More significantly, there is also conflict of interest between operators of different scale. Indonesian export taxes and restrictions on timber access, designed to help conserve supply, accentuate this conflict. Whereas the large sawmillers attached to the concessions in Kalimantan produce a high-quality product and continue to do well, the medium-sized mechanized mills have had a difficult time. In South Kalimantan, they have disappeared from rural areas, forcing the people of whole villages to move to town. Moreover, in the city, there is now a gap between the very large producers and the tiny, handoperated wantilan, which use offcuts from the bigger mills and cater to the bottom end of the market (Potter field survey, July 1991).

The same problems have emerged among processors of rattan carpets. The industry developed from a rural cottage base, from where it gained access to the Japanese market, with the encouragement of local officials. Tighter restrictions on quality and export regulation have seen its increasing concentration in large urban factories and even a shift from Banjarmasin to Surabaya in Java. These changes index a tendency toward centralization as resources become less abundant, greatly exacerbating inequalities and reducing local opportunities. It is significant that it is the least well-off who suffer most.

The difficulties standing in the way of a change in this situation are well expressed, for Indonesia, by Petrich (1993: 71-77), who writes:

Economic activity is dominated by "a dense, intensely personal network of public monopolies, private cartels, and bureaucratic fiddles." Foremost among the protected industries is the forest products area. Here the President's closest friends and family have long ago secured (and continue to amass) incredible fortunes through what are, to all intents and purposes, unregulated logging practices, protectionist policies, favouritism, nepotism, corruption, etc. No Indonesian environmental policy formulation - or implementation and formulation thereof - in the forestry area is done without consideration of the effects on or consultation with a handful of selected businessmen. The main obstacle to reform in this area is, therefore, a lack of political will.

For Malaysia, we similarly have to note the coincidence of political success in Sarawak with the award of logging concessions. As a part of the ongoing conflict between federal and state authorities differing in political persuasion, the Chief Minister of Sabah has been charged in the courts with nepotism in the award of timber contracts. In the Peninsula, a quite remarkable tale goes unrecorded, in which it is said that some specialists were invited to recommend for conservation a remaining forest area in the state in which they resided, only to see a logging concession over their selected area allocated to a company led by the close relative of a state ruler.11

At the highest levels, these remain the realities in eastern Sundaland. At lower levels the interconnections between politicians or the military (in Indonesia), mainly Chinese entrepreneurs, local Malay or Dayak notables, and the bureaucracy lead to many arrangements. So long as there is money to be made these are likely to continue. Below this level are the understandings between subcontractors, Dayak villagers, and under-resourced transmigrant settlers, which facilitate what is called "illegal logging." Such arrangements, as old in their nature as any in history, will persist as long as high demand for tropical timbers continues. Those ultimately responsible, therefore, are the consumers of tropical timber (often for purposes where the special qualities of these slow-growing woods are in no way a necessary requirement) in Japan, America, Europe, and elsewhere in the developed world.

In 1991 the International Tropical Timber Organization issued a document, after lengthy discussion, specifying how a sustainable tropical timber production could be achieved by the year 2000. Each participating country is expected to adopt a compatible plan. International timber entrepreneurs, such as Elliott (1992: 320), believe that this will generate "a new horizon for Forestry in the Tropics." Preparations are being made, in both Malaysia and Indonesia, to be able to have all timber exports labelled as being produced by sustainable methods by 2000.12 However, by the year 2000 not too much of the huge resource that was still there in 1960 will be left.


For those areas not already converted to agriculture, the greatest risk of future criticality arises from pressures to log even more intensively. This is least a risk in the Peninsula, where there is a well-researched forestry system (Salleh and Tang, 1973; Mok, 1977; Salleh, 1978). Despite limitations due to a federal system under which forest concessions are a matter for the states, a strong Forest Department is increasingly capable of implementing its policies. These have recently included a 12.5 per cent reduction in the permitted coupe between 1985 and 1990 (Government of Malaysia, 1991a). Illegal logging, a major problem in most parts of Borneo, has been less of a problem in the Peninsula, though it did exist, and might still do so despite enforcement of regulations in 1992.13 Unauthorized invasion by cultivators, too, is nowadays a problem principally of Borneo, where it includes enlargement of the clearings of shifting cultivators; we review this further in the next chapter. 14

In the areas converted there are clearly problems, and there must remain a question as to whether it has been wise to convert so much, so quickly, rather than exploit the timber of the forest on a more rational basis, integrated with an appropriately scheduled wood-using industry. This, however, is to use hindsight - a poor tool in any planning. The sound management systems that could make sustainable forestry possible have been worked out only while the timber boom has been in full swing, and the real recovery time of natural forest is only now being established. Moreover, policy has not yet caught up with the fact that this period might be at least twice that previously envisaged. By the time sustainable forestry is firmly in place the resource will have been reduced to a tiny fraction of its former size.

There is, therefore, room for considerable doubt concerning the long-term future of the forestry and wood-using industries of the region, and over the employment prospects of the large population now dependent on these industries. What is already happening in Sabah is likely to become the pattern over a much larger area during the coming 10 years. Adapting Jodha's (1990) sense of the term, discussed in the Appendix, the whole forest-based economy must be regarded as "fragile," unable to withstand the pressures currently placed on its resource base. Moreover, and contrary to the conclusion proposed by Rockwell and Moss (1992), this threatened collapse is in an economy wide open to the international market, and closely related to that openness. Clearly, a period of major adaptation is in prospect. The "resource frontier" phase, both in forestry and in agriculture, is either at or will soon reach an end, whether to lead to collapse or to a sustainable future. This is the interim conclusion that we carry forward in the argument of this book. It leads, logically, to questions regarding the indigenous people of the forest.


1. Tree fall, especially when a number of trees fall simultaneously in rare high-wind events, dislodges a considerable amount of soil around the roots.

2. The comparison between runoff rates under forest and on cleared land is given at 25 per cent, against 75 per cent by other writers (Mooney et al., 1987; Salati et al., 1989).

3. A part of this pressure involved statements, allegedly by sources in the central bank, that Sabah log production had increased by 43 per cent in 1992, to a figure almost twice the state's officially recorded output (Lad Kwok Kin, 1993).

4. The Chief Minister hoped that this action would gain Sarawak exemption from controls of tropical timber imports threatened in some developed countries (Business Wire, 1993).

5. However, enrichment planting has been regarded as unsuccessful in the Peninsula in the past and little is now done (Aten Suwandi, n.d.).

6. In 1990, Kalimantan was estimated still to have 22.7 million ha in forest with "management potential," i.e. outside protected areas, national parks, etc. Of this, nearly 6 million ha (26 per cent) was classified as "conversion and unclassed forest" (eventually to be cleared for agriculture and other activities) and 16.7 million ha was production forest. Of the production forest, 10.8 million ha was classed as "unlogged," 4 million ha as "logged," and 1.9 million ha as "heavily logged" (FAO/GOI, 1990).

7. Most current concessions have expired or were due to expire between 1993 and about 1995. Therefore the opportunity exists to offer longer periods, which might encourage concessionaires to adopt more conservationist logging policies.

8. This is discussed further in relation to factories in the city of Banjarmasin in chapter 10.

9. During mid-1992 fieldwork Potter learned from local people in South Kalimantan that they do not like working on these estates, which would explain why Javanese are being recruited to fill this labour shortage. Mayer (1988, 1989) has described problems of poor health conditions, particularly due to malaria, within the HTI and also the uncertainties associated with short-term labour contracts with local people.

10. The Economist (7833, 8 October 1993: 31) reports that Mr Wong had recently announced a US$143 million deal involving property, a coal mine, and almost 200,000 ha of forest. Mr Wong, however, continued to insist that the concession would be managed sustainably. 11. No source can be given. In Malaysia it remains treason to criticize the state rulers.

12. Meantime, great concern arose over a unilateral Austrian decision to require such labelling in 1992, a Dutch decision to do the same by 1995, and pressures to impose such require meets throughout the European Union. After some lobbying by the Indonesian and Malaysian governments, the Austrian law was repealed in 1993 (Business Times [Malaysia], 7 October 1993; Reuters News Service, various dates).

13. Cargoes of logs of uncertain origin have reportedly been seen in some east coast ports.

14. In the Peninsula there is localized invasion of the forests by commercial shifting cultivators, especially for the cultivation of ginger, which commands a high market price (Brookfield, Samad Hadi, and Zaharah Mahmud, 1991: 71). However, since illegal clearings must be small to remain undiscovered, the long-term damage to the forests is less than where larger clearings are made.

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