Property Rights and Deforestation in Indonesia: Implementing Community Forestry in Indonesia, The Tale of Two Villages.


By Hizkia Respatiadi[1], Center for Indonesian Policy Studies

Executive Summary

The Indonesian constitution mandates that all natural resources remain under the control of the state. Over the years, legal stipulations put different levels of government in charge but the authority to manage the forests stayed with government agencies. This has been ineffective in reducing deforestation in the country and the villagers in close proximity to forests continued to live in poverty. Without property rights, they were unable to legally enjoy the benefits of forest resources and consequently were tempted to take part in illegal forest exploitation, such as poaching and illegal logging.


In recent years, the Indonesian government gradually implemented provisions of the national forestry law, granting those local communities the right to get involved in forest resource management. The villagers were required to set up a village forestry board and they had to share the profits with the state in order to be granted the right to use and access forest resources. The Indonesian community forestry policy intends to provide concessions to 33,000 villages across Indonesia but property rights alone will not reduce deforestation and improve the villagers’ livelihoods. Complementary activities are necessary.


This study presents the experiences in this regard, of the two villages of Sembungan and Buntu in Kejajar District, Wonosobo Regency, Central Java Province. These two villages are situated only 10 kilometres apart and both had been offered partial property rights under the community forestry policy. The way both villages managed the opportunity was substantially different. While Sembungan developed an ecotourism site, which has contributed to the villagers’ livelihoods, Buntu has struggled to build its own initiative. Instead, this village was threatened by plans of the national state-owned forestry company, Perum Perhutani, to cut trees around the village.


We conclude, in order for communities to reap the full entrepreneurial benefits of increased property rights three program management goals must be met. First, there needs to be an agreement among the villagers that changes due to economic development can be beneficial for the village. An exposure to successful cases may help create such an agreement. Second, there needs to be capacity-building programs to improve planning, organization, finance and human resource management skills in the villages. Third, villages need to engage with external actors in neighbouring villages, government agencies and business circles to win their support for local development projects.

Indonesian Forestry at a Glance

“Spread over 18,000 islands, Indonesia contains the world’s third largest area of rainforest after the Amazon and Africa’s Congo Basin”

-      Rainforest Action Network, 2016 -

Indonesian forests cover more than 91 million ha or 53% of Indonesia’s land mass[2]. The forests generally are divided into three categories: conservation, protection, and production forests.


Conservation forests preserve the richness of Indonesia’s biodiversity, including plants, animals and their ecosystems. In addition, they also store no less than 433.5 metric ton of CO2/ha in their living biomass[3], which makes them critically important for mitigating the effects of climate change.


Protection forests support human livelihood by preserving soil fertility, preventing erosion and floods, and maintaining ground water supplies. They are important because millions of Indonesians live on the slopes of about 150 volcanoes and experience an average national rainfall of 2,702 millimetres per year[4].


Production forests are exploited for economic benefits and can be cut down partially or in their entirety. These forests contributed a gross value added of over $3.2 billion to the Indonesian economy in 2009[5]. Products include timber, rattan, pine tree sap, wood resins, sandalwood oil etc.


Article 33 of the Indonesian Constitution states that “the land, the waters and the natural riches contained therein shall be controlled by the State and exploited to the greatest benefit of the people”[6]. Forestry Law 41/1999 stipulates accordingly that the government has the authority to “maintain and manage anything related to forest, forest area, and forest produces”[7]. In this regard, state-owned enterprises, business cooperatives, and private enterprises are being told to “gradually empower” local community cooperatives “to become solid, independent and professional cooperatives having equal position with other economic enactors”.[8] During the initial years of democracy and decentralisation after 1998, however, this was hardly implemented and for years local communities had no property rights and no access to local forest resources.


The lack of local property rights and the poor management of forest resources by authorities on different levels of government were significant contributors to large-scale deforestation.[9] From 1990 – 2015, Indonesia lost an average of 1,101,400 ha of forestland per year[10]. Meanwhile, the government hardly utilized the economic potential of forest resources for the livelihood of local communities. Today 16 million villagers, who live inside and around the forest, have insufficient incomes and remain poor.[11] Without proper access and rights to the forest resources these villagers engage in illegal activities (such as logging and poaching) in attempt to escape poverty.[12]


Gradually, however, the state-owned forestry company Perum Perhutani started to involve village communities in forest management. In the Wonosobo Regency a sustainable forest resource management guideline[13] stipulated in 2006 that local communities around the forests will be trained in forest management and granted access to the benefits of forest resources.[14]


Then, in 2009 the national government issued a guideline on forest resource management with local communities[15]. The guideline acknowledges the communities’ rights to fair representation in the management and protection of forest resources. In order to be included, a village needs to form a Village Forestry Board[16] and it must agree on a profit-sharing model with Perum Perhutani.[17]


Finally, in 2015, a new community forestry policy was announced with the intention of giving 12.7 million hectares of state forest concessions to the management of local communities in 33,000 villages. All these villages were asked to set up communal institutions to manage the forests and engage with Perum Perhutani in order to benefit from the newly-acquired property rights.


This study compares experiences of two villages located in the Kejajar District, Wonosobo Regency, in the province of Central Java. Buntu and Sembungan are only 10 km apart from each other and they are positioned on the Dieng volcanic plateau at 2,000 meters (6,600 feet) above sea level. Several high mountains that are part of the Bisma Mountain Range surround them. With particularly high precipitation rates of 3,500 – 4,000 mm per year[18], the forests in this region play an important role in preserving soil integrity and absorbing rainwater.


Image 1

Kejajar District Administrative Map, with Buntu and Sembungan villages

Source: (Website of Wonosobo Community, 2010)



Case study on Buntu and Sembungan villages


A.      Buntu village

Brief statistics[19]

Size of area: 3.34 km2

Altitude: 1,328 meters above sea level

Population: 2,429 (677 households)

Size of state forest area: 35 ha


Buntu is one of many villages in the Wonosobo regency exposed to high risk of rainfall-related disasters such as floods and landslides. Located at the foot of Mount Sindoro (summit at 3,136 metres), the surrounding forests play an important role in protecting the soil from erosion. Since heavy floods destroyed 2,500 m2 of land in 1997 the villagers know the importance of keeping the forests intact[20].


As Buntu is located in a beautiful landscape some villagers considered ecotourism to utilize the partial property rights granted to Wonosobo in 2006[21]. Cengkul Suri Hill lies 5 km from the village at 1,900 metres above sea level and offers breath-taking sunsets and a beautiful view of the Dieng Plateau. A trekking path was built in 2010 and with further development this site could become a popular tourist destination. The Wonosobo regency government was supportive of these plans. It considered opening more access roads to Cengkur Suri Hill and to engage in discussions with Perum Perhutani as the planned roads needed to go through state forests.


In the end, however, these plans were never realized. About a quarter of the villagers were afraid that tourism may have negative and unwelcome effects on the youth. The villagers eventually agreed to abandon the ecotourism plans and to use their property rights instead for the development of intercropping in the local forests.


The idea was to plant silk trees between the original trees of the local forest. This would be lucrative because every silk tree has potential value of up to $150, and even more in the event that the tree trunk was processed and turned into building material. The villagers also planned to diversify the crops by planting bamboo, tamarillo and guava trees. Unfortunately, the village’s forestry board could not effectively implement this plan because there was no proper agreement regarding the maintenance of the trees, the sharing of profits, and individual responsibilities for implementing the plan. This lack of clarity and organization among the villagers and their forestry board led to the failure of this project. The young silk trees were stolen even before Buntu villagers could harvest them.


The inability of Buntu villagers to take full advantage of their property rights brought unwanted consequences. In 2015, Perum Perhutani announced plans of cutting down 800 trees in the state forests surrounding Buntu. These forests were classified as production forests and, as the villagers left them untouched, they were considered under-utilized. The plan met fierce resistance from the villagers, who had come to understand that deforestation increased the risk of floods and landslides.[22] Their official petition (see Image 2) to Perum Perhutani was endorsed by the Wonosobo Regency Government because it was in line with a reforestation programme that campaigned for the planting of deep-rooted plants since 2008.[23] The regency was afraid that villagers would return to planting potatoes and other seasonal crops that would not maintain the quality of the soil and would lead to dangerous erosion.  Perum Perhutani eventually abandoned its plans.



Image 2

Petition by Buntu villagers from 2015 rejecting Perum Perhutani’s plan to cut trees in the forests around their village[24]



B.      Sembungan village

Brief statistics[25]

Size of area: 2.65 km2

Altitude: 2,121 metres above sea level

Population: 1,251 (321 households)

Size of state forests area: 50 ha


Sembungan is the highest village on Java island and offers several tourist attractions. After the village received property rights over local forest resources it decided in 2011 to develop the Golden Sunrise Sikunir (GSS) ecotourism site. This joint venture between local villagers, their village forestry board and Perum Perhutani brought major changes to the work and livelihoods of the villagers. Before 2011, almost all villagers worked as potato farmers with an average monthly income of $150 [26]. By taking part in the ecotourism sector, 280 villagers now have additional incomes of up to $190 depending on their involvement.[27]


Tourism to Sembungan began complementing local farmers’ incomes in the 1980s. They worked as local tour guides and paid informal fees to forestry officials when entering state forests. Just like other regions on the Dieng Plateau, however, Sembungan also suffered from deforestation that put the village at risk of floods and landslides. With the new community forestry guideline from 2006 and in line with the regency’s reforestation campaign after 2008, the Sembungan Village Representative Council[28] started a forest rehabilitation program. In addition, the villagers also went through several capacity-building activities, learning how to manage a forest ecotourism site in Sikunir and the surrounding lakes and waterfalls. In 2011, the village forestry board finally managed to reach an agreement with Perum Perhutani and opened the GSS ecotourism site to the public.


In June 2013, the village forestry board legally incorporated the Kelompok Sadar Wisata Association for Cebong lake and Sikunir hill[29] called “Pokdarwis”. The association is registered under the Ministry of Laws and Human Rights and is officially recognized by government agencies, banks and other organizations. At the village level, Pokdarwis cooperates with the Indonesian Tour Guide Association (HPI). At the provincial level there is a co-operation with the Association of Indonesian Tour and Travel Agencies (ASITA), whose 148 travel bureaus promote tourist destinations in Indonesia. [30]


Currently, Pokdarwis has 280 members. All of them are villagers of Sembungan. Some work as tour guides, ticketing staff, security personnel, parking attendants, cleaning staff, food and drink vendors, hoteliers, or sell souvenir items and handicraft. These entrepreneurs must follow certain service standards and rules. For example, accommodation providers can only charge their guests in accordance with their facilities (e.g. a maximum $15 a night for rooms with a private bathroom, and a maximum of $11.28 a night for rooms with a shared bathroom. They also must provide guests with at least coffee or tea and serve freshly-baked potatoes for breakfast. Meanwhile, food, drinks, souvenirs, and handicraft are also sold below a maximum price set for each item. Any violation of these rules can be reported to the Pokdarwis secretariat.


Right from the beginning, Pokdarwis encouraged the villagers to engage. Those with spare rooms were advised to turn them into homestay accommodation. Those who owned flat land were offered the opportunity to turn it into parking lots. Pokdarwis also facilitated negotiations between villagers and the village representative council[31] regarding rent agreements for food and drinks stalls as well as souvenir and handicraft shops.


Admission fees to the GSS ecotourism site stand at $.75 cents per person, collected from an average of 5,000 visitors per month or up to 3,000 visitors per day during the holiday season. Revenues are being shared between Pokdarwis representing the local community, Perum Perhutani representing the national government, and the village forestry board as the facilitator between Pokdarwis and Perum Perhutani. Pokdarwis receives 44%, Perum Perhutani 35%, and the village forestry board 13%. The remaining 8% are given to the village representative council who use it for social programmes in education, health care etc. Pokdarwis receives additional income from the fees for using public toilets. Accommodation owners pay a portion of their income to HPI, which recruits, trains and pays their staff.


Most villagers employed at GSS are part-time workers and are able to continue their main occupation.  Now they have additional income and are able to be more productive with their time. From all 280 members, one hundred take on alternating positions as ticketing staff, tour guides, general and accommodation security personnel, and lavatory attendants. Twenty people support the parking of cars and five are general cleaners. Thirty people have been recruited by HPI and work in tourist accommodations as housekeepers, cooks etc.


Table 1

Total number and average monthly income of ecotourism workers in GSS[32]



Number of Staff


Monthly Income

Source of Funds


100 (changing assignments)

USD 45


Tour guide

USD 75


General security

USD 30


Accommodation security

USD 30


Lavatory attendants

USD 45


Parking staff


USD 19

Land owners



USD 45


Accommodation staff


USD 75




The remaining 125 Pokdarwis members are full-time individual entrepreneurs who have opened tourist facilities, such as homestay accommodation, run food and drinks stalls, or manage souvenir and handicraft shops. They engage in profit-sharing arrangements in accordance with their businesses.



Table 2

Total number and average monthly income of business owners in GSS[33]



Number of owners


Monthly Income

Profit-sharing arrangements

Homestay accommodation


USD 188

80% to owners, 20% to HPI


Food and drink vendors


USD 150

100% to owners.

Land use charges of 23 USD/year paid to the land owner


Souvenir and handicraft shops


USD 451

Same as food and drink vendors



Implementing community forestry in Indonesia

It is a well-researched paradigm[34] that property rights lay at the core of protecting forests and other common pool resources. Experiences in many countries suggest that community forestry[35] reduces deforestation and improves the livelihoods of the rural poor. Full property rights include the right to transfer property to others but this has been ruled out by the Indonesian constitution, which mandates the state to remain in control of forest resources. Instead, Indonesian communities are being granted partial property rights to use and access the forests and to enjoy the proceeds of forest management. These usufructuary rights enable people living in and around the forests to exploit the forests’ produce, such as honey, fruits, resins, and wood oil. It also includes the right to use the forests as tourist destinations.


The new Indonesian policy that intends to grant partial property rights to 33,000 villages will allow the villagers to gain economic benefits from their local forests, albeit in cooperation with the state-owned forestry company Perum Perhutani. But this alone does not lead to more prosperity and less deforestation. The cases of Buntu and Sembungan clearly demonstrate that the same types of property rights granted to similar villages do not necessarily reap the same benefits.


The stories of the two villages reveal substantial differences in three areas: the attitudes and preferences of the villagers, their capacity to manage local forests, and their relations with external actors. 


Firstly, the villagers of Buntu and Sembungan have different perceptions of tourism and a different outlook on the future of their village. Sembungan villagers generally concur that tourism provides additional income and they feel compelled to develop it. In contrast, approximately 25% of Buntu villagers want to avoid tourism as they feel that it may affect the morale of the youth. This negative perception of tourism limits their options and their chances to improve their livelihoods.


Secondly, Sembungan acquired the capacity to set up Pokdarwis with well-structured rights and responsibilities of the members with each member performing a specific role in the GSS ecotourism site. Buntu, on the other hand was unable to set up clear and detailed arrangements between the villagers who had participated in the planned intercropping project. This lack of organization resulted in the project failing to reach the intended objectives.


Thirdly, Pokdarwis of Sembungan managed to create and sustain profit-sharing partnerships with key actors, such as Perum Perhutani and the village forestry board. It also co-operated with HPI, which supported staff employment in the accommodation sector, while ASITA promoted the GSS ecotourism site through its member agencies. Meanwhile, Buntu did not have any strategic partnership with actors outside the village that could have supported their intercropping project. 


The contrasting experiences in both villages suggest that complementary actions are needed in order for villages like Buntu to take full advantage of increased property rights and be successful like Sembungan.


To address negative perceptions of changes caused by economic development, village representative councils need to be exposed to experiences of other village forestry boards in neighboring villages. This might provide clarity and a more optimistic outlook towards the benefits of developing the local economy. The exposure has to provide a broad picture of options available to utilize forest resources in a partial property rights system – including tourism, agriculture, manufacturing and other service industries. District (Kecamatan) and regency (Kabupaten) government agencies need to provide practical guidance to help villagers see how property rights can improve the livelihoods in their village.


Capacity-building programs and the transfer of know-how from one village to the other help improve management skills in the villages. Pokdarwis of Sembungan visited an ecotourism site in West Java to learn from the local organizers. Other villages can similarly learn from each other how to manage development projects, be it intercropping, tourism, or other sectors; sharing knowledge in key management skills such as planning, organization, finance, and human resources. In order to minimize risks, trying small-scale, short-term projects (e.g. 3-month paprika intercropping in Buntu) is recommended as these may serve as prototypes to improve future endeavors. These projects also provide “short-term wins” that build confidence and inspire the implementation of larger-scale projects. 


Finally, Sembungan demonstrated the importance of co-operating with external actors. Perum Perhutani must be involved from the beginning as this company holds the key to accessing forests surrounding the village. The village forestry board needs to build strategic relationships with Perum Perhutani and local government agencies on the district and regency levels. They also need to verify the feasibility of their development projects by engaging with relevant business circles, such as the agroindustry for intercropping and travel agencies for tourism. Academic institutions in nearby cities may be able to provide fresh and innovative insights regarding the development potential of their region.  



ASITA                             :  Association of Indonesian Tour and Travel Agencies

BPD                                 : Badan Perwakilan Desa (Village Representative Council)

GSS                                  : Golden Sunrise Sikunir (ecotourism site)

HPI                                   : Himpunan Pramuwisata Indonesia (Indonesian Tour Guide Association)

LMDH                              : Lembaga Masyarakat Desa Hutan (Village Forestry Board)

Perum Perhutani              : Indonesian state-owned company for forest management

Pokdarwis                        : Kelompok Sadar Wisata (Tourism Management Group by the local community of Sembungan village





[1] wHizkia Respatiadi is the researcher in charge of the 'Trade and Livelihood' focus area of the Center for Indonesian Policy Studies in Jakarta. Previously, Hizkia served as a civil servant at the Ministry of Foreign Affairs of Indonesia. His international assignments include the Indonesian Embassy in Harare, Zimbabwe, and short assignments to the United Kingdom and several countries in Asia and Africa.Hizkia obtained his Bachelor’s Degree in Business Administration from the University of Indonesia, and holds a Master’s degree in Public Management from Victoria University in Wellington, New Zealand.


[2] UN FAO. Global Forest Resources Assessment 2015: Desk Reference, Food and Agriculture Organization of the United Nations, Rome, 2015. p. xiii, available at

[3] Josil P. Murray, Richard Grenyer, Sven Wunder, Niels Raes, Julia P.G. Jones. ‘Spatial patterns of carbon, biodiversity, deforestation threat, and REDD+ projects in Indonesia’, in 00/0 Conservation Biology (2015) p. 5, available at

[4] Compared to 715mm in the US and 700 mm in Germany.

[5] UN FAO. Global Forest Resources Assessment 2015 - Country Report: Indonesia. Food and Agriculture Organization of the United Nations, Rome, 2015. p.105, available at

[6] Constitution of Indonesia,

[7] Law of the Republic of Indonesia Number 41 of 1999 regarding forestry,

[8] Elucidation of Law of the Republic of Indonesia Number 41 Year 1999 Concerning Forestry,

[9] World Bank 2006

[10] UN FAO. Global Forest Resources Assessment 2015: Desk Reference, Food and Agriculture Organization of the United Nations, Rome, 2015. p. xix, available at

[11] Gutomo Bayu Aji, Joko Suryanto, Rusida Yulianti, Amorisa Wirati, Ali Yansyah Abdurrahim, Temi Indriati Miranda. 2014. Strategi Pengurangan Kemiskinan di Desa-desa Sekitar Hutan: Pengembangan Model PHBM dan HKm [Poverty Reduction Strategy for Forest Villages: The Development of PHBM and HKm Model]. Lembaga Ilmu Pengetahuan Indonesia (LIPI) [Indonesian Institute of Sciences]. p.2, available at

[12] David Reed describes the example of Seasot village at the slopes of Mount Rinjani where many villagers joined illegal logging activities (Reed, 2006, p. 80). This is just one of many stories from all across Indonesia.

[13] Joint regulation between Perum Perhutani Regional Division of Central Java and Wonosobo Regent No. 2871/044.3/Hukamas/I and 661/13/2006 on Sustainable Forest Resources Management (PSDHL), signed in 2006.

[14] Rina Mardiana. 2007. Kasus Pengelolaan Hutan Negara di Wonosobo, Jawa Tengah. Krisis Ekologi dan Kebijakan Pengelolaan Sumberdaya Alam di Era Desentralisasi [Case Study on State Forest Managament in Wonosobo, Central Java. Ecological Crisis and Natural Resources Management in the Era of Decentralization]. Department of Science and Community Development, Faculty of Human Ecology, Bogor Agricultural Institute [Online] p.11, available at

[15] The Regulation of Perum Perhutani Board of Directors No. 682/KPTS/DIR/2009 on the Guidelines for Forest Resource Management with the Community (PHBM), signed in 2009.

[16] Lembaga Masyarakat Desa Hutan (LMDH)

[17] Hasrul Hanif, Totok Dwi Diantoro, Ronald Ferdaus, Edi Suprapto. 2013. ‘Transformasi Tata Kelola Hutan Jawa: Menuju Pengelolaan Hutan oleh Rakyat Pasca Implementasi Pengelolaan Hutan Bersama Masyarakat [Transformation of Forest Management in Java: Moving Towards Forest Management by the People After the Implementation of Forest Resource Management by the Community]’. In: Edi Suprapto & Agus Budi Purwanto (eds.) Hutan Jawa: Kontestasi dan Kolaborasi [Forest in Java: Contest and Collabration]. Yogyakarta: Biro Penerbitan Arupa. pp.79-80, available at

[18] Badan Meteorologi dan Geofisika [Indonesian Meteorology and Geophysics Agency] 2016. Tingkat Curah Hujan Dataran Tinggi Dieng [Precipitation Rates on the Dieng Plateau].

[19] Statistics Indonesia, Kecamatan Kejajar Dalam Angka 2015 (Kejajar District in Figures 2015), p.11.

[20] Interview with Suroto, Buntu villager, 28 April 2016.

[21] See footnote 7 above

[22] Interview with Supardi, Buntu Chief of Village, 13 January 2016.

[23] In 2008 the Wonosobo regency government approved of a Dieng Recovery Task Force (TKPD) to lead the restoration and reforestation of the Dieng Plateau. The task force consists of local government officials, academics, environmental activists, and journalists.

[24] Document obtained from the Buntu Village Representative Council

[25] Statistics Indonesia, Kecamatan Kejajar Dalam Angka 2015 (Kejajar District in Figures 2015), p.11.

[26] Interviews with Iswanto, Sembungan villager, 13 January & 28 April 2016.

[27] Interviews with Bukheri, finance and administration officer from Sembungan village, 3 & 15 June 2016.

[28] Badan Perwakilan Desa (BPD)

[29] Perkumpulan Kelompok Sadar Wisata (Pokdarwis) Cebong Sikunir

[30] Interview with Tafrihan, Committee Member of Pokdarwis Sembungan, 30 June 2016.

[31] Badan Perwakilan Desa (BPD) – the village level assembly of elected representatives

[32] Interviews with Pokdarwis finance and administration officer, 3 and 16 June 2016

[33] Interviews with Pokdarwis finance and administration officer, 3 and 16 June 2016

[34] Elinor Ostrom, Governing the Commons. The Evolution of Institutions for Collective Action, Cambridge, 1990

[35] Some of these experiences have been described in a policy paper by the Center for Indonesian Policy Studies on “Forest Ownership and Management in Indonesia: Reducing Deforestation by Strengthening Communal Property Rights” published in June 2015:



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