The policy dilemma for balancing reforestation funds

Abstract

According to Law No. 25/1999, 40% of the total Reforestation Funds (Dana Reboisasi (DR)) collected from forestry concessionaires was allocated to the contributing regions (Daerah Penghasil), whilst the remaining 60% allocated to the central government was used for reforestation in the non-contributing regions. In the year 2002, the central government distributed 40% of DR in the form of Special Allocation Funds (Dana Alokasi Khusus (DAK)) among the regions through the provincial government. The provincial government then distributed the funds to all districts in the province without taking into account whether or not a district was actually a contributing or non-contributing region. In South Sulawesi, 40% of DR is now distributed through a scoring system based on the following assessment factors of each region: (1) Projection of DR revenue (score value 30) (2) The extent of forest and critical lands (score value 25) (3) The critical level of watersheds and inter-connection between upstream and downstream (score value 30) (4) Institutional capacity (score value 15) Through this financial mechanism, the total value of DAK-DR received by contributing districts will likely be lower than that receive by non-contributing districts.