Enviro News Asia, Jakarta — Indonesia’s forestry business sector has called for measured and objective improvements in forest governance following the government’s decision to revoke forest utilisation permits held by 22 companies across Sumatra.
The Indonesian government announced the revocation of 22 Forest Utilisation Business Permits (PBPH), covering a total area of 1,010,991 hectares in Aceh, North Sumatra, and West Sumatra. The policy was introduced as part of the government’s response to recent hydrometeorological disasters in the region.
Responding to the decision, the Secretary General of the Asosiasi Pengusaha Hutan Indonesia (APHI), Purwadi Soeprihanto, said that flooding in Sumatra should be assessed from multiple perspectives rather than attributed to a single cause. He explained that extreme rainfall linked to tropical cyclones, watershed characteristics with steep upstream topography, land-use change—particularly in non-forest areas—and broader climate dynamics all contributed to the disaster.
APHI expressed respect for the government’s efforts to reorganise forestry licensing as part of broader reforms to improve national forest governance. However, the association urged authorities to ensure that evaluations and enforcement measures are conducted in a proportional and objective manner, while allowing room for corrective guidance in order to achieve governance improvements without causing excessive socio-economic disruption.
Purwadi warned that permit revocations affect not only companies but also thousands of workers and communities living around forest areas. He said the policy could weaken socio-economic resilience in regions that have long depended on forestry activities for livelihoods.
He also highlighted potential risks to the sustainability of Indonesia’s forestry supply chain, noting that the national forestry industry remains heavily reliant on domestic timber supplies. A reduction in upstream raw material production would directly disrupt downstream industrial processes, potentially affecting forest product exports and Indonesia’s overall competitiveness in international markets.
According to APHI’s preliminary estimates, the revocation of PBPH permits in the three Sumatran provinces could result in the loss of approximately 19,000 jobs across upstream and downstream sectors. The association also projected annual losses of around USD 125.29 million in domestic forest product trade value, non-tax state revenue, export taxes, and foreign exchange earnings. Purwadi said the estimate did not yet account for broader multiplier effects on regional economies.
Purwadi stated that APHI would engage in intensive consultations with the government to consider the socio-economic implications of the policy. At the same time, the association remains committed to promoting improved corporate governance and encouraging forestry companies to implement sound and lawful sustainable forest management practices. (*)
