Civil society conflicts – Environment & social conflicts

Dr Sebastian Braun, “National park management between rhetoric and results: The failure of Indonesia’s mainstream conservation model in Tesso Nilo and the advantages of private property in nature conservation efforts”. Deutsche Asienstiftung 2012, Volume 2, Issue 1  

Civil society conflicts – Environment & social conflicts Volume 2

2012

Issue 1

National park management between rhetoric and results: The failure of Indonesia’s mainstream conservation model in Tesso Nilo and the advantages of private property in nature conservation efforts

Dr. Sebastian Braun

Andreas Wimmer, MSc.

Copyight ©2012 The Deutsche Asien Stiftung. All rights reserved. 1  

 

Dr Sebastian Braun, “National park management between rhetoric and results: The failure of Indonesia’s mainstream conservation model in Tesso Nilo and the advantages of private property in nature conservation efforts”. Deutsche Asienstiftung 2012, Volume 2, Issue 1  

National park management between rhetoric and results: The failure of Indonesia’s mainstream conservation model in Tesso Nilo and the advantages of private property in nature conservation efforts

Dr. Sebastian Braun, Andreas Wimmer, MSc.

Abstract: Mainstream models of nature conservation, as they are proposed by Environmental Global Action Networks (EGAN), such as Greenpeace and the World Wide Fund for Nature (WWF), focus on the creation of public property (in the form of national parks), legal prohibitions (such as bans on logging and on trade in endangered species), public education and, more recently, carbon trading schemes. As Indonesia’s Tesso Nilo national park demonstrates, the mainstream approach is not only costly but also highly ineffective. According to our findings, two thirds of the park have been encroached, the park management itself has allegedly been involved in illegal logging, human-wildlife conflict continues unabated, wildlife continues to dwindle and the local population remains hostile to the conservation model. In this paper we attempt to show that the failure of Tesso Nilo is due to the application of mainstream conservation models that are based more on rhetoric than results and ignore economic realities. Alternative, market-based solutions exist and have been proven to be both costeffective and successful in delivering tangible results. Effective private property rights incentivize the local population to engage in sustainable management of natural resources: “if it pays, it stays.” By contrast, the strategies of the EGANs create social conflict and perverse incentives. International donors should pay more heed to results than rhetoric. This is the first of a series of working papers that will examine the various models of civil society development in Indonesia. The authors consider themselves independent researchers who reject blind faith in collectivist green ideologies and focus on pragmatic, results-based solutions. It is an undeniable fact that environment and development are not mutually exclusive but reinforce each other (otherwise rich countries would not have cleaner environments). At the same time, we recognize the complexity of the issues at hand and the need for more detailed study by governments, donors and NGOs. All too often, the environmental and developmental debate is characterized by political correctness, vested political and economic interests as well as a lack of realism.

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Dr Sebastian Braun, “National park management between rhetoric and results: The failure of Indonesia’s mainstream conservation model in Tesso Nilo and the advantages of private property in nature conservation efforts”. Deutsche Asienstiftung 2012, Volume 2, Issue 1  

Contents 1. A critical review of mainstream conservation models: Greenpeace, the WWF and CITES 2. The Tesso Nilo conservation model: NGOs and the state vs. the people 3. The advantages of private property in nature conservation 4. Conclusion: The need for more results-based pragmatism and less empty rhetoric

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Dr Sebastian Braun, “National park management between rhetoric and results: The failure of Indonesia’s mainstream conservation model in Tesso Nilo and the advantages of private property in nature conservation efforts”. Deutsche Asienstiftung 2012, Volume 2, Issue 1  

1. A critical review of mainstream conservation models: Greenpeace, the WWF and CITES Mainstream conservation models focus on the creation of public property, legal prohibitions, public education and, more recently, carbon trading schemes. Representative institutions with high-level influence are the WWF, Greenpeace and the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). These players define the mainstream models in environmental and wildlife protection. A cursory review of their websites reveals the main strategies they pursue. Greenpeace aims at achieving “zero deforestation, globally, by 2020”.1 Regardless of the fact that this statement ignores commercial forestation and the global demand for paper, this is Greenpeace’s overarching objective with regard to forests. According to its website, Greenpeace engages in corporate action (“investigate, expose and confront environmental abuse by corporations”), influencing consumers, political ‘solutions’ such as REDD (reduced emissions from degradation and deforestation), cooperation with indigenous communities and certification (The Forest Stewardship Council, FSC). With regard to Indonesia, Greenpeace states:2 “The mass destruction of Indonesia's rainforests and carbon-rich peatlands for palm oil and paper is the main reason why Indonesia is the world's third largest emitter of climate changing greenhouse gases. Greenpeace is campaigning for an immediate moratorium on forest and peatland destruction in Indonesia, and for zero deforestation by 2015.“ Greenpeace seems to see its main enemies in private companies and thus focuses in its campaigns on customer sentiments and supply chains: “To achieve this, we investigate the global supply chain that turns forests in Indonesia into consumer products around the world, and we expose the companies that are destroying forests. Over the past few years, our campaigns and pressure from our supporters have led Nestlé, Unilever and other corporate giants to cancel vast contracts with notorious rainforest destroying suppliers like Sinar Mas.“ Thus, besides campaigning against private interests, the prohibition on logging (moratorium), FSC certification and REDD, Greenpeace does not seem to offer any concrete strategies for protecting forests. Greenpeace thus focuses on „anti-“strategies: It is all about being against something and going after identifiable ‘bad guys’, rather than proposing viable, selfsustaining solutions that do not require the use of (legal and sometimes illegal) force and                                                                                                                         1

See http://www.greenpeace.org/international/en/campaigns/forests/solutions/ (accessed January 2013). Greenpeace and the WWF are proponents of the controversial climate change theory. Although we are no climate scientists ourselves, we do not take something for granted for which there are a great number of dissenting experts (e.g. the Heidelberg Appeal), a lack of evidence and an apparently politically motivated exaggeration of facts. If human-created climate change were as big a problem as claimed, there would be no need for the kind of governmental force and overweening bureaucracies that climate’s self-professed protectors have put in place or are in the process of putting in place. 2 See http://www.greenpeace.org/international/en/campaigns/forests/asia-pacific/ (accessed January 2013). 4  

 

Dr Sebastian Braun, “National park management between rhetoric and results: The failure of Indonesia’s mainstream conservation model in Tesso Nilo and the advantages of private property in nature conservation efforts”. Deutsche Asienstiftung 2012, Volume 2, Issue 1  

prohibition by law. FSC certification imposes significant costs on businesses, disadvantages developing countries, and serves to concentrate power (and money) in the hands of the certifiers.3 Carbon “cap and trade” schemes, as implied in REDD,4 create artificial markets whose main effect is the increase in business costs, as economist Robert Murphy has pointed out: „It should be understood that so-called “cap and trade,” while held as a free-market process, is not so in the least. With cap and trade, government limits the amount of emissions that can be produced, and companies bid for the rights to the available quantity of emissions. Government-limited emissions trading in a “market” does not constitute free markets. Thus despite the superficial resemblance, cap and trade isn’t really a free market. The number of permits is an arbitrary scarcity imposed by government fiat. In the real market, resource prices indicate genuine scarcity. If an oil pipeline is attacked, the price of oil goes up, causing industry and consumers to economize on the commodity. This response is rational, because the available supply truly has gone down. But if the prices of oil, coal, and other fossil fuels explode because of a cap and trade program, this won’t reflect genuine economic scarcity. Consumers will be forced to restrict their use not because there is less supply available, but because of a number dreamed up by Washington bureaucrats. This is no more a “market price” than if the government decided to sell people permits giving them permission to sneeze. (This actually makes sense, since exhaling emits CO2.) Cap and trade is not a market-based solution. It relies on a political scheme to increase costs, and can therefore be justly viewed as a tax, stealthy or otherwise, on energy – the lifeblood of our economy. So here’s the real difference: cap and trade masks the causes of higher consumer prices much better than a straightforward tax. And that is precisely why so many politicians endorse it.”5 Furthermore, on closer inspection, REDD is little more than a simple redistribution policy (“developed countries paying developing countries for their forests”, that is, for not developing their land). As such, it deserves criticism for replacing „productive industries with short-term foreign aid“ and thus creating a dependency on this transfer of financial resources.6 The NGO World Growth is not so far off the mark when it wrote that REDD+                                                                                                                         3

See http://worldgrowth.org/2012/09/new-report-fscs-closed-shop-shutting-down-forestry-in-the-developingworld/ (accessed January 2013). 4 According to the UN, “REDD is a mechanism to create an incentive for developing countries to protect, better manage and wisely use their forest resources, contributing to the global fight against climate change. REDD strategies aim to make forests more valuable standing than they would be cut down, by creating a financial value for the carbon stored in trees. Once this carbon is assessed and quantified, the final phase of REDD involves developed countries paying developing countries carbon offsets for their standing forests. REDD is a cutting-edge forestry initiative that aims at tipping the economic balance in favor of sustainable management of forests so that their formidable economic, environmental and social goods and services benefit countries, communities, biodiversity and forest users while also contributing to important reductions in greenhouse gas emissions.“ See http://www.un-redd.org/UNREDDProgramme/FAQs/tabid/586/language/en-US/Default.aspx (accessed January 2013). 5 See http://www.instituteforenergyresearch.org/2008/06/04/cap-trade-is-not-a-market-solution/ (accessed January 2013). 6 See http://worldgrowth.org/site/wp-content/uploads/2012/11/WG_REDD_2012_271112.2.pdf (accessed January 2013). 5  

 

Dr Sebastian Braun, “National park management between rhetoric and results: The failure of Indonesia’s mainstream conservation model in Tesso Nilo and the advantages of private property in nature conservation efforts”. Deutsche Asienstiftung 2012, Volume 2, Issue 1  

„allows rich countries to buy permission to pollute, and condemns poor countries to forgo economic growth and increase dependence on international aid payments.“7 While REDD does not „condemn“ poor countries to remain trapped in poverty, it does create incentives that are inimical to self-development. In addition, due to the fact that such schemes create an artificial market, the price tags put on the carbon ‘stored’ in forests are based on arbitrary calculations that have given rise to criticism.8 WWF Indonesia employs four main strategies to „ensure sustainable forest conservation“: 1. Conservation management, 2. Sustainable land use planning, 3. Sector reform and 4. Sustainable financing for conservation. By „conservation management“, the WWF understands the creation of an „ecologically representative network of effectively managed protected areas to protect and maintain biodiversity“, the „involvement and support of local communities“ and the improvement of „the effectiveness of protected areas“. Sustainable land use planning aims at creating a “low carbon economy”. By “sector reform”, the WWF implies “sustainable business practices” as assessed by FSC certification. Finally, like Greenpeace, the WWF sees sustainable financing opportunities in REDD.9 The creation of protected areas, as demanded by the WWF, implies the creation of public property, usually in the form of national parks. Public properties tend to suffer from the Tragedy of the Commons problem. This is the “depletion of a shared resource by individuals, acting independently and rationally according to each one's self-interest, despite their understanding that depleting the common resource is contrary to their long-term best interests.”10 A “shared resource” denotes a property whose titles are not properly defined or which is not owned by an individual or a family but by a large group of individuals not connected to each other in any specific way, e.g. the state. In this setting, each individual that wishes to make use of the property has the incentive to overuse it or to outpace rival users in order to achieve the relatively highest utility. Typical examples are the overgrazing of pastures and the hunting to (near) extinction of un-owned or publicly owned (owned by all means, in effect, by no one) wildlife such as whales and bison. Moreover, governments do not face strong incentives to protect public property such as nature, as economist Murray Rothbard has noted: “But government ownership is not true ownership, because the government officials, while able to control the resource cannot themselves reap their capital value on the market. Government officials cannot sell the rivers or sell stock in them. Hence, they have no economic incentive to preserve the purity and value of the [publicly owned] rivers.“11                                                                                                                         7

Ibid. See http://worldgrowth.org/2012/11/press-release-western-deforestation-aid-is-immoral-threatens-developingeconomies/ (accessed January 2013). According to this source, „a review of the program by the World Bank also shows [REDD] is grossly inefficient, costing US$22 million to disburse just $4 million in grants.“ And: „new analysis shows emissions of greenhouse gases from deforestation have been found to be overstated by as much as 100 per cent.“ 9 See http://www.wwf.or.id/en/about_wwf/whatwedo/forest_species/strategies/ (accessed January 2013). 10 See http://en.wikipedia.org/wiki/Tragedy_of_the_commons (accessed January 2013). 11 See http://mises.org/daily/5978/The-Libertarian-Manifesto-on-Pollution (accessed January 2013). 8

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Dr Sebastian Braun, “National park management between rhetoric and results: The failure of Indonesia’s mainstream conservation model in Tesso Nilo and the advantages of private property in nature conservation efforts”. Deutsche Asienstiftung 2012, Volume 2, Issue 1  

Especially (but not only) in developing countries where the rule of law is weak, government ownership is attended by corruption and the capture of the legislative process by powerful economic interests. After all, ‘big business’ and ‘big government’ make perfect bedfellows. But also in modern, Western democracies, politicians face short-term incentives, as they might be voted out of office during the next election.12 As short-term caretaker of a property, one faces different incentives than as owner. That management of natural resources by the state is the worst possible method to safeguard nature has also been empirically confirmed by a recent CIFOR study, which states that, “Deforestation rates are substantially higher on lands protected by the state than in community-managed forests.”13 This view is also held by Fred Pearce of the American Property and Environment Research Center: “When the state is in charge, rules are barely enforced, corruption is frequent, and forest dwellers have little stake in protecting forest resources, because they do not own them. Where the people who live there control the forests, they are much more likely to protect them.”14 Community-based conservation models, however, require a high degree of social homogeneity and cohesion, which are usually found in small communities only. In indigenous tribes and small villages where everyone knows everyone and poaching or illegal logging would mean stealing from one’s neighbor social control tends to work. This does not apply to heterogeneous mass societies, though. Here, due to anonymity and a lack of close inter-personal ties, this kind of social control tends to break down because in this case poaching means stealing from someone unknown. CITES prides itself on regulating international trade in endangered species. By its own account, “international wildlife trade is estimated to be worth billions of dollars” annually.15 CITES subjects international trade in specimens of selected species to certain controls, “according to the degree of protection they need”.16 Thus, CITES’ main function is to restrict trade in endangered species. Demand for such species has proven to be highly inelastic (demand does strongly correlate with prices), though. As a result, prices go further up when restrictions create artificial scarcity (due to the prohibition of trade). That is why such restrictions are counterproductive, as argued with regard to the Rhino horn trade by environmental economist Michael 't Sas-Rolfes who has been actively involved in various conservation initiatives for 25 years: “The ban is causing an artificial supply shortage that is driving the price up to outrageous levels and thereby attracting highly-sophisticated organized crime syndicates into the trade. (…) Medicinal demand in Asia persists and appears to be deeply entrenched in the culture,                                                                                                                         12

See Hans-Hermann Hoppe (2001): Democracy – The God That Failed, Transaction, New Brunswick. For example, the fact that good long-term policies are likely to benefit the successor rather than the initiator in democracies with frequent election cycles provides a disincentive to passing such policies and an incentive to generating short-term benefits whose long-term effects might be disastrous. 13 See http://www.forestsclimatechange.org/media-forestsnclimate-change/pressreleases.html?tx_fccpressrelease%5Bid%5D=6045 (accessed November 2012). 14 See http://perc.org/articles/busting-forest-myths-people-part-solution (accessed November 2012). 15 See http://www.cites.org/eng/disc/what.php (accessed January 2013). 16 See http://www.cites.org/eng/disc/how.php (accessed January 2013). 7  

 

Dr Sebastian Braun, “National park management between rhetoric and results: The failure of Indonesia’s mainstream conservation model in Tesso Nilo and the advantages of private property in nature conservation efforts”. Deutsche Asienstiftung 2012, Volume 2, Issue 1  

causing demand to be price-inelastic (i.e. relatively insensitive to price increases). This means that the rhino horn trade ban simply drives up prices and therefore raises the incentives for poaching.”17

2. The Tesso Nilo conservation model: NGOs and the state vs. the people The formation of the Tesso Nilo National Park has been fraught with difficulties from the beginning. The main actor in the park’s formation was the WWF. APRIL had logging rights to a large section of what became the Tesso Nilo National Park. After initial lobbying by the WWF was unsuccessful in persuading APRIL to give up its concessions, the Swiss-based group began pressuring APRIL’s customers and asked CNN to do a report on APRIL and Tesso Nilo. In February 2002, the British affiliate of Friends of the Earth released a report highly critical of APRIL and called for a European boycott of its products. APRIL eventually promised to stop all logging inside Tesso Nilo, stop building a second road through it, and to stop buying wood from other suppliers accused of involvement in illegal logging.18 In September 2002, when APRIL barred other loggers from using its private ferry on a river near the forest, an angry mob attacked security guards at the ferry-crossing post and set it afire. A 31-year old father of two small children and a 19-year-old were brutally beaten to death and their bodies were dumped in the river. According to Riau-based sources and investigators, the murderers were involved in illegal logging operations and used the ferry as a short-cut. The alleged leader of the murderous gang was reported to be the relative of a local politician who became a Bupati (regent).19 Despite such setbacks, APRIL, the WWF, and local officials reached an agreement to set up checkpoints and conduct joint APRILWWF patrols to combat illegal logging. During this period APRIL submitted to audits of its timber purchases, which showed wood was from authorized sources, and committed to protecting "high-conservation-value forest land" in its Indonesian forest concessions. In 2006, APRIL and WWF agreed on doubling the size of Tesso Nilo National Park to 1,000 square km, with the former giving up its logging rights in the area and pledging to persuade other permit holders to do so as well. That same year a meeting between WWF staffers and villagers turned violent and the WWF staffers were chased back to their base camp, where the villagers threatened to burn the outpost and kill the staffers. In 2009, a patrol car owned by

                                                                                                                        17

See http://perc.org/articles/q-rhino-and-tiger-economics (accessed January 2013). See also http://perc.org/articles/african-success-namibia-people-and-wildlife-coexist, http://perc.org/articles/shootelephant-save-community, http://perc.org/articles/saving-african-rhinos-market-success-story, http://perc.org/articles/save-wildlife-namibias-farmers-take-control (accessed January 2013). 18 On the circumstances leading up to the establishment of Tesso Nilo see the article “Environmentalists, Loggers Near Deal On Asian Rainforest“, http://online.wsj.com/article/SB114066232214180908.html (accessed in December 2012). 19 One of the reported prime suspects was later arrested - not for murder but for stealing from a police palm oil plantation. 8  

 

Dr Sebastian Braun, “National park management between rhetoric and results: The failure of Indonesia’s mainstream conservation model in Tesso Nilo and the advantages of private property in nature conservation efforts”. Deutsche Asienstiftung 2012, Volume 2, Issue 1  

the Tesso Nilo National Park office was attacked and set on fire.20 The villagers reportedly opposed the enlargement of the National Park area. The perimeter of Tesso Nilo is about 112 km. It is notable that after 10 years a fundamental aspect of the park’s framework, the delineation of its borders, is still not completed. According to the Tesso Nilo Foundation Executive Director the current status (December 2012) is that the boundary demarcation is almost finished, with about seven km remaining to be demarcated. The process has taken so long to complete because villagers keep removing demarcation posts. This indicates that local resentment continues to this day. According to the Critical Ecosystem Partnership Fund (CEPF), the annual budget for Tesso Nilo is unknown. Funding for Tesso Nilo has come from various sources. According to one report (data until 2007), the CEPF allocated 16 grants totaling USD 2,261,996 to Tesso Nilo– Bukit Tigapuluh but the total expenditure seems to have been higher than USD 8 million (see below).21 A Tesso Nilo Conservation Forest Trust Fund was established to finance the longterm management of the area. WWF US and WWF Japan supported the establishment of this fund, with WWF Japan contributing USD 40,000. The Belgian Government committed to provide EUR 200,000 in assistance for the construction of a Sumatran elephant conservation centre in the Tesso Nilo National Park, with the first quarter of these funds disbursed in 2011. The project aims to fund the relocation of dozens of tame elephants from Minas in Siak district, to Tesso Nilo.22 Thus, Tesso Nilo has received substantial financial aid over the years and despite claims to the contrary we found the amount to be considerably sufficient. This raises the question of whether an independent financial audit with a focus on corruption is required to disprove the allegations of corruption. The Tesso Nilo Trust Fund was established in Indonesia and offshore, with the Trust Fund Secretariat in Jakarta. A trust fund based in Brunei Darussalam was established and HMR Trust Ltd became Trustee for the Tesso Nilo Conservation Trust. The WWF also built a partnership with HSBC Singapore so that the latter could act as management trustee.23 In accordance with the trust fund, the Tesso Nilo National Park Foundation is the only local agency that is the beneficiary. The Nature Conservation Agency (Balai Konservasi Sumber Daya Alam, BKSDA24) has purchased land for USD 150,000 for a national park office. Details about the management of and contribution to this trust fund are unclear.                                                                                                                         20

See http://news.detik.com/read/2009/02/13/155109/1084589/10/mobil-patroli-milik-dephut-dibakarperambah-hutan-tesso-nilo (accessed in December 2012). 21 The 2007 CEPF Final Project Completion Report mentions the expenditure of 2,261,996 USD until 2007. 22 See http://en.wikipedia.org/wiki/Tesso_Nilo_National_Park (accessed December 2012). 23 HSBC has been an active supporter of the FSC (Forest Stewardship Council) brand, with executives within HSBC telling the assessment team off the record that the sustainable engagement policies should prevent bankers from being criticized or attacked by militant non-governmental organizations as well as prepare the banking system for new carbon trade schemes. HSBC, besides Deutsche Bank, is heavily invested in nontraditional banking systems (Interview with senior banking executive on the bank’s policy of engaging with CSO communities like WWF). The exact nature of the trust remains somewhat a mystery since trusts do not qualify for transparent reporting excluding the funding from tax and public accounting practices. 24 On 15 January 2013, in an attempt to recover some of the park areas, the authorities planned to poison palm oil trees and evict migrant workers. 9  

 

Dr Sebastian Braun, “National park management between rhetoric and results: The failure of Indonesia’s mainstream conservation model in Tesso Nilo and the advantages of private property in nature conservation efforts”. Deutsche Asienstiftung 2012, Volume 2, Issue 1  

Tesso Nilo National Park is managed by the Tesso Nilo Foundation, which is said to bring together 17 stakeholders from the NGO community, private sector, and local population. The Tesso Nilo Community Forum represents a total of 22 villages. The Tesso Nilo Foundation Executive Director estimates that around 7,000 villagers continue to live inside the park. This represents 0.13% of the 5.5 million residents in Riau.25 As indicated by the instances of violence mentioned above, Tesso Nilo suffers from a lack of support by the local population. The main grievances are loss of income (from logging, small-holder plantations, subsistence farming, hunting wildlife) and human-wildlife conflict. To mitigate these problems, the Tesso Nilo Foundation has launched an eco-tourism project (www.tessoniloecotour.com) and says it conducts regular so-called “flying squad” patrols in which trained elephants are used to chase away wild ones. The foundation of the Tesso Nilo National Park, the management of the park, the conservation of forests and wildlife, as well as the economic compensation of the local population for the loss of income incurred by the creation of the park, require examination against the widely accepted good-governance principles of relevance, effectiveness, efficiency, and sustainability. As mentioned above, large sections of Tesso Nilo used to be concession areas of private companies, including APRIL. Negotiations between the WWF and APRIL led to the declaration of Tesso Nilo National Park by the Indonesian Government. The legal status of national parks is such that forests and wildlife contained therein are legally or formally protected by the state. Consequently, in formal terms, the creation of Tesso Nilo was relevant to the objective of nature conservation. However, the implementation method lacked effectiveness and sustainability, as the local population did not play a significant role in the establishment of the park. The involvement of NGOs does not negate this. Even after attempted education of the villagers on the need for nature conservation by NGOs, large sections of the villagers continued to be opposed to it and ignored the rules that came with it (e.g. the prohibition of encroachment). So-called usage zones within Tesso Nilo, which the villagers are still allowed to use, were defined but this did not alleviate the fact that large sections of what the villagers used to regard as their property - or at least theirs to use and monetize - now represented an area that was de facto out of bounds for them. The ongoing removal of demarcation poles by disgruntled villagers attests to the lack of sustainability of the park’s creation. Park management, in broad terms, is responsible for the maintenance of the park area, that is, the protection of the boundaries against encroachers, loggers, and poachers; aspects directly relevant to the project objectives. Park management also controls the decision-making procedures. The collaborative methods employed by the Tesso Nilo Foundation have not led to an increasing acceptance of the park amongst the local population and can thus not be said                                                                                                                         25

See Central Bureau of Statistics: Census 2010; http://www.bps.go.id/65tahun/SP2010_agregat_data_perProvinsi.pdf (accessed December 2012). 10  

 

Dr Sebastian Braun, “National park management between rhetoric and results: The failure of Indonesia’s mainstream conservation model in Tesso Nilo and the advantages of private property in nature conservation efforts”. Deutsche Asienstiftung 2012, Volume 2, Issue 1  

to have been effective or sustainable. However, the assessors were not informed of any concerns about stalemate or gridlock in the decision-making process of the Foundation. How effective has the performance of the park management been in terms of park protection? According to public reports and information gathered during the evaluation, the picture seems to be very bleak. Encroachment, illegal logging, and the killing of wildlife continue to occur. Even the park management itself has been suspected of being involved in these activities. A 2008 CEPF report noted that “corrupt staff of the park management authority are reportedly involved in illegal logging.”26 Another CEPF report in 2007 came to the damning conclusion that “about 20% of park staff were involved in illegal logging activities and encroachment” and that “no firm action against those actions” had been taken.27 Evidence as to the degree of encroachment is patchy but information gathered by the authors suggests that encroachment has been massive. According to a CEPF report, encroachment was estimated to have “doubled, from 18,000 ha in 2005 to 35,600 ha in 2006.”28 Asked to provide a figure for the percentage of the overall Tesso Nilo National Park area which would now be regarded as “seriously degraded”, a senior executive of one of the Indonesian pulp and paper companies in December 2012 put the number at a staggering 66 percent, and indicated that a number of maps were available which supported this estimate.29 In other words, two thirds of Tesso Nilo had been encroached by the end of 2011. The economic implications and costs of this failed experiment have not been accounted for or acknowledged, not even to major donors, which public data suggests have included the Government of Australia and the United Nations.

Figure 1: Map of Tesso Nilo30

                                                                                                                        26

See CEPF (2008): Expansion of Bukit Tigapuluh National Park and Protection of Its Wider Ecosystem, Final Project Completion Form. 27 See CEPF (2007): Assessing Five Years of CEPF Investment in the Sumatra Forests Ecosystem of the Sunderland Biodiversity Hotspot. 28 See CEPF (2007): Creation and Management of the Tesso Nilo Protected Area as a Centrepiece of Sumatra’s Tesso Nilo Bukit/Tigapuluh Conservation Corridor. 29 The executive declined to provide the assessor with a soft copy of a map but maps obtained via government sources, including one obtained from the Tesso Nilo Foundation, seem to indicate the same degree of deforestation. 30 Source: Indonesian Ministry of Forestry (obtained from Tesso Nilo Foundation Executive Director), dated 2012 indicating that only the green areas are covered with forest. White areas within the Tesso Nilo National Park are degraded. 11  

 

Dr Sebastian Braun, “National park management between rhetoric and results: The failure of Indonesia’s mainstream conservation model in Tesso Nilo and the advantages of private property in nature conservation efforts”. Deutsche Asienstiftung 2012, Volume 2, Issue 1  

Massive migration to the Tesso Nilo area has been claimed as responsible for the encroachment. Hard evidence to back this claim is lacking and even if it were true it would change nothing in the analysis. The question of “who” encroaches into a protected area is less important than “why” and “how” to deal with it. It is unclear whether the WWF is suggesting a ban on migration as a measure to tackle encroachment. This would be tantamount to condoning the installation of an authoritarian polity – something that would require the firm hand of an authoritarian leader, a concept unacceptable in today’s democratic Indonesia. Anti-poaching patrols have been carried out and are relevant to the project objectives. Their effectiveness could not be established, however. As of 2007, these patrol activities were said to have confiscated 33 snares (11 tiger snares and 18 prey snares from the Tesso Nilo area and four prey snares from the corridor). Effectiveness is also lacking in human-wildlife conflict mitigation. Twelve elephants were reportedly killed in Riau over a two-month period in 2006. In earlier days it was estimated that the population has decreased by 75 percent, from 1,067-1,617 elephants in 1985 to 353431 elephants in 2003. Information on what is the exact elephant population in the National Park varies widely. In a Chinese publication dated 13 June 2012, the number of elephants was estimated to be 2,400 to 2,800, down from the 3,000 to 5,000 reported in 2007.31 In October 2012, another elephant was found dead, with a total of eight elephants recorded dead in Tesso Nilo from March to October 2012.32 The Tesso Nilo Foundation argues that it does not possess a sufficient number of flying squads to adequately protect the villages from elephant incursions. However, it seems unlikely that more money would solve the problem. To date, there has been no financial payment to the villagers to compensate them for the restrictions placed on them by the creation of Tesso Nilo. In any event, the mere transfer of funds would not be sustainable, as villagers would expect to receive even further payments                                                                                                                         31

See http://www.china.org.cn/environment/2012-06/13/content_25636032.htm (accessed December 2012). See http://www.wwf.or.id/en/about_wwf/whatwedo/forest_species/where_we_work/ tessonilobukittigapuluh/?26180/Eight-Elephants-Dead-in--Tesso-Nilo (accessed December 2012) 32

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and the incentives for them to become financially independent would therefore be low. It is unclear to what extent locals will profit from the recently launched eco-tourism. It is, however, highly unlikely that the proceeds from this activity will be significant. The intergovernmental CEPF (which coordinates funding from the Governments of France and Japan as well as the World Bank) alone allocated 16 grants totaling USD 2,261,996 to Tesso Nilo–Bukit Tigapuluh up to 2007 (based on its own data). This is a large sum and, given the lack of concrete results, does not suggest an efficient or acceptable management of public funds. The total expenditure by donors has probably been significantly higher than the sum disbursed by CEPF. The table set out below, which was taken from a CEPF document, suggests that donor funding of the Tesso Nilo project, at a minimum, exceeds USD 8.2 million.33 Table 1: Tesso Nilo donor expenditure

Another Riau-based activist group in the WWF family, Eyes on the Forest, carries the following statement on its website: ‘Eyes on the Forest is a coalition of three local environmental organizations in Riau, Sumatra, Indonesia: WWF Indonesia’s Tesso Nilo Programme, Jikalahari, and Walhi Riau”. There is no clarity on the degree to which WWF diverts funds raised for Tesso Nilo purposes to Eyes on the Forest. On 20 December 2012 Eyes on the Forest released a highly aggressive attack on the company APRIL. This was another demonstration of current NGO priorities despite the fact that one year earlier the

                                                                                                                        33

See http://www.cepf.net/Documents/asia.sari.surjadi.cepf.pdf (accessed December 2012). There is no explanation of the table in the presentation. 13  

 

Dr Sebastian Braun, “National park management between rhetoric and results: The failure of Indonesia’s mainstream conservation model in Tesso Nilo and the advantages of private property in nature conservation efforts”. Deutsche Asienstiftung 2012, Volume 2, Issue 1  

current administration of president Yudhoyono put the foreign NGOs on notice by telling them to “back off domestic affairs.”34 It could be reasonably expected that, in view of the extreme difficulties and high levels of degradation the Tesso Nilo National Park now faces, the WWF, the Tesso Nilo Foundation, and other project proponents would now be seeking, and claiming to need, more funds to improve performance. However, given the above, there seems to be little basis for believing that more money would lead to better conservation outcomes. Rather than better results, a likely outcome of increased funding would be further increases in corruption risks. In addition, as Tesso Nilo is not the private property of the management and the latter will only obtain more funds if problems persist, the park management is not incentivized to improve performance. Rather, they could be expected to continue to perform in a sub-optimal way in order to ensure continued and increasing funding support. Table 2: Relevance, effectiveness, efficiency and sustainability of project activities Project activity Relevant? National park Yes legal status National park Yes management

Effective? No: encroachment

Efficient? No

Protection of Yes forests and wildlife Eco-tourism as Yes an alternative source of income for locals

No: illegal logging No and elephant poisoning No Untested and No: locals unproven unlikely to benefit significantly

No: apparently No corrupt

Sustainable? No: locals do not support it No: the park is not the management’s private property No

We find that too much focus is given to using Tesso Nilo to promote secondary agendas rather than on the needed conservation outcomes. It also seems that there are few moves underway to question whether the legal status of the park management is in the process of being changed, or if the existing charter is being deliberately violated, since very little external oversight or public transparency is present. This account does not seek to assign blame since there is insufficient material publicly available to allow for definitive conclusions. Rather, it has identified the need for a full and transparent investigation and review of the causes and the consequences of the failings at Tesso Nilo. In view of the various agendas at play, this should be done by an independent advisor. A re-evaluation of donor strategies (from the donors’ perspective), policy decision                                                                                                                         34

http://www.thejakartapost.com/news/2011/12/23/sby-tells-foreign-ngos-back-domestic-affairs.html; December 2011

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making processes, audit controls, and engagement with all stakeholders is recommended. A full review is of critical importance, given that there are voices within the Indonesian NGO movement openly advocating further national park approaches in Sumatra, and that donor groups including the World Bank and foreign government donors have shown signs of being tempted by such notions.

3. The advantages of private property in nature conservation According to CIFOR, the best protected forests in the Third World are those parts of the Amazon rainforest that are designated as community-managed native reserves run by the Kayapo Indians and others.35 Community forest management, however, does not effectively deal with the tragedy of the commons problem because the number of owners tends to be too large. This approach only works in highly homogenous societies such as small indigenous tribes but not in highly diverse settings such as in Indonesia where a multitude of different ethnicities, tribes, and migrants have to get along with each other. Here, individual rather than communal property rights lend themselves to nature conservation. It can then be argued that a primary reason for excess deforestation is that forest lands are not owned privately.36 If property rights connected to forests are protected, deforestation on a massive scale is less likely to occur. In countries where forest property rights are wellprotected, forests are either stable or growing. Thanks to commercial forestry the amount of new forest growth exceeds the amount of wood and paper that is consumed in the world every year.37 Environmental groups might dispute this fact but there is no reason to believe that paper companies are not interested in maintaining forests. On the contrary, the paper industry depends on trees and forests because they provide the raw material for its products.38 The protection of property rights serves the purpose of safeguarding forests because landowners are incentivized to manage their proprietary forests sustainably. The incentive results from the fact that the long-term value of private property tends to be higher than its short-term value: “Private ownership ensures that plants, animals, and other valued wildlife will thrive because owners can make more money by taking good care of their property rather than allowing it to disappear or deteriorate. In preserving these valuable assets, they can                                                                                                                         35

See http://e360.yale.edu/feature/busting_the_forest_myths_people_as_part_of_the_solution/2495/ (accessed January 2013). 36 See Kel Kelly (2010): The Case for Legalizing Capitalism, The Ludwig von Mises Institute, page 386ff. The book is available at www.mises.org free of charge. See also Murray Rothbard (1973): The Libertarian Manifesto on Pollution, http://mises.org/daily/5978/The-Libertarian-Manifesto-on-Pollution (accessed November 2012); and Steffen Hentrich (Hrsg., 2011): Eigentum und Umweltschutz, Friedrich Naumann Stiftung. 37 See Floy Lilly (2009): Three Myths about Trash, http://mises.org/story/3887 (accessed November 2012). 38 It is in the interest of paper companies to maintain forests, and companies will manage forests sustainably if the forests are the companies’ private property. 15  

 

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physically reproduce them for the purpose of repeat sales. For example, breeding and selling cattle perpetually is more profitable than killing them all for a one-time sale.”39 In addition, markets have the advantage of indicating scarcity and providing the means for an increased supply to remedy the scarcity of a certain good. Thus, if too many trees were cut down, the price of lumber would rise exponentially and the business of tree growing would become more profitable than, say, parking lots or other alternative land uses, which in turn would generate increased investments in reforestation.40 That reforestation and economic growth are not mutually exclusive is corroborated by a study the New York Times reported on in November 2006 in which the American National Academy of Sciences confirmed “that reforestation has become a widespread pattern in welloff countries and also in a few that are not so well off” and that “reforestation is directly linked to prosperity.”41 Incidentally, a similar study on a different forest in Indonesia unearthed the same results as this report. The authors arrive at the following conclusions: “Top-down government regulations that ignore the local social and cultural systems have degraded local knowledge and diminished the relevance of indigenous knowledge systems. Communities have been alienated from their own land, and have become dependent on foreign systems of exploitation and management. (…) It would make more sense if the rights and interests of the traditional owners of the Rendani Protection Forest were recognized by [the state] (…) The situation that has arisen in the Rendani forest is an illustration of the vicious cycle of breakdown in resource management arrangements that follows the denial of local people’s traditional rights and the imposition of a management regime that does not acknowledge the rights and interests of the traditional owners. What is needed in Rendani, as elsewhere in Papua, is a fundamental change in state thinking about resources and their ownership, to develop a partnership of interests between local and state actors for the mutually beneficial and sustainable management of those resources.”42 The same lessons apply to the protection of wildlife. Here, empirical evidence seems to be even stronger. For example, after ownership of wildlife was turned back to the people of Namibia in 1990, the country’s wildlife registered a sharp increase. 43 Run by local community groups, the conservancies give benefits and create jobs through hunting and tourism. More than 80 percent of all large wild mammals live on private and community                                                                                                                         39

See Kel Kelly (2010): The Case for Legalizing Capitalism, The Ludwig von Mises Institute, page 386ff. One such example of reforestation investment can be found here: http://www.lifeforestry.com/ (accessed January 2013). 41 See http://www.nytimes.com/2006/11/20/opinion/20mon4.html?pagewanted=print&_r=0 (accessed November 2012). 42  See  Hidayat  Alhamid,  Peter  Kanowski  and  Chris  Ballard  (2009):  Forest  Management  and  Conflict:  The  Case  of   the  Rendani  Protection  Forest  in  Papua“,  in:  Working  With  Nature  Against  Poverty  –  Development,  Resources   and  the  Environment  in  Eastern  Indonesia,  ISEAS,  Singapore.   43 See http://perc.org/articles/african-success-namibia-people-and-wildlife-coexist (accessed in January 2013). See also http://perc.org/articles/save-wildlife-namibias-farmers-take-control (accessed January 2013). 40

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lands, and their populations have increased by 70 percent. The conservancies are not parks, herding and farming continues within the conservancy. Because of the economic value contained in the wildlife and the fact that the locals derive direct benefits from it, the dangers from poaching and human-wildlife conflicts are very limited. In this respect, trophy hunting not only provides the locals with the largest source of financial benefits but also provides an effective way of dealing with problem animals, such as crop-eating elephants. The benefits are substantial, one of the Namibian conservancies “now earns about $172,000 a year — big money in a rural culture where people live on a dollar a day — and has created jobs for more than 30 area residents. Overall, conservancies earned about $5.3 million in direct income and generated about $40 million for the Namibian economy in 2009.”44 Trophy fees range from $1,000 for a kudu up to $25,000 for an elephant. Openness to foreign investment also helped: Safari lodges, which are a large source of both income and employment, require the involvement of outside companies. The latter build and run the lodges in partnership with the conservancies, and Namibia now has 44 such joint ventures, providing 800 full-time jobs. The Namibian model is so successful that delegations from around the world come to Namibia to see if they can replicate it. However, the community conservancy model works in Namibia because the country has only 2.1 million inhabitants and a very low degree of density: six people per square mile. This makes for a decentralized setting where the mutual familiarity of the community members (societal homogeneity and cohesion) leads to effective social control. “Where property rights to wildlife have been assigned to local communities—either through explicit institutional reforms or innovative entrepreneurship—Africans have proven that private ownership means resources stewardship.”45 By contrast, in Kenya, anti-hunting groups succeeded in lobbying for a ban on all hunting in 1977. As a result, its wildlife population declined between 60 and 70 percent: elephants declined from 167,000 in 1973 to just 16,000 in 1989.46 Today the situation has been brought under control with the country’s elephant population doubling to 32,000 but the negative effects from the ban could have been avoided. Hunting bans deprive wildlife of their economic value, generating the view among rural Africans that wildlife is a liability rather than an asset. Moreover, because of the lack of income from wildlife, landowners turned to agriculture instead of habitat protection. This decreased available habitat and increased the potential for human-wildlife conflicts. The experience in Zimbabwe is another success story: “In 1989, results-oriented groups such as the World Wildlife Fund helped implement a program known as the Communal Areas Management Programme for Indigenous Resources or CAMPFIRE. This approach devolves the rights to benefit from, dispose of, and manage natural resources to the local level, including the right to allow safari hunting. Ten years                                                                                                                         44

Ibid. See http://perc.org/articles/shoot-elephant-save-community (accessed January 2013). 46 Ibid. 45

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after the program began, wildlife populations had increased by 50 percent. By 2003, elephant numbers had doubled from 4,000 to 8,000. The gains have not just been for wildlife, however. Between 1989 and 2001, CAMPFIRE generated more than $20 million in direct income, the vast majority of which came from hunting. During that period, the program benefitted an estimated 90,000 households and had a total economic impact of $100 million. Between 1989 and 2005, Zimbabwe’s total elephant population more than doubled from 37,000 to 85,000, with half living outside of national parks. (…) All of this has occurred with an economy in shambles, regime uncertainty, and mounting socio-political challenges.”47 Private sector investment in wildlife conservation throughout southern Africa has resulted in more than 9,000 private game ranches, 1,100 privately managed nature reserves, and over 400 conservancies. In South Africa, 23% of the land is under conservation management and of that 17% is private. Between 1964 and 2007, estimated numbers of game have risen from 575,000 to more than 18 million: “Contrast this with Kenya, which banned hunting in 1977 and has lost between 60 and 70% of its large wild animals since then!”48 By being granted property rights to wildlife, local communities are able to internalize both the costs and benefits from wildlife. If the latter’s economic benefits exceed the costs of human-wildlife conflicts, in other words, if wildlife pays its way, it is likely to stay. Antihunting groups such as the People for the Ethical Treatment of Animals (PETA) refuse to accept these facts. According to PETA, there are better, nonlethal methods to deal with wildlife, such as beehives on top of poles to create low-cost ‘fences’, the planting of crops elephants do not like or “chili bombs” made of elephant dung infused with chili pepper. These methods have been proven to be highly ineffective, though. A 2008 WWF report on human-wildlife conflicts in Namibia found that such methods are time consuming and costly.49 Thus conclude Terry Anderson and Shawn Regan: “Organizations such as PETA, the International Fund for Animal Welfare, Earthjustice, and Greenpeace are but a few well-funded groups whose boycotts, protest marches, and letterwriting campaigns produce lots of rhetoric but few results. In contrast, hunting organizations such as Safari Club International or environmental groups such as the Environmental Defense Fund, whose motto is "finding the ways that work," get a real bang for their buck. PETA’s rhetoric may take the moral high ground, but (…) hunting is putting more elephants on the earth. The next time you write a check to your favorite environmental group, ask whether you are buying environmental rhetoric or environmental results.”50 4. Conclusion: The need for more results-based pragmatism and less empty rhetoric As demonstrated above, mainstream conservation models rest on the state as the main pillar of execution. Environmental lobby groups such as Greenpeace and the WWF, and state actors, such as the CITES, focus on the creation of public property (national parks), prohibitions                                                                                                                         47

Ibid. Ibid. 49 Ibid. 50 Ibid. 48

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(ban on logging and trade in endangered species) and on artificial market schemes that aim at putting an arbitrary price tag on nature. The latter is necessarily arbitrary, as prices emerge on the free market between buyers and sellers and not from the offices of bureaucrats. Prohibitions create perverse incentives, as they cause artificial shortages and, because demand for such goods has proved to be inelastic, artificial price increases, which in turn create strong incentives towards illegal activities such as poaching and logging. The creation of public property is often troublesome, as local communities rightly claim ownership to the natural resources surrounding them and consider the creation of national parks to be theft-like deprivations of economic benefits. By contrast, market-based solutions create incentives that lead to voluntary nature conservation. Thus, the main difference between the mainstream models and the private property regime introduced here is that the former relies on state force and the latter on the vested interests of private property owners. For locals to believe that nature and wildlife are worthy of protection, they need to be allowed to reap the economic benefits that come with natural resources. If the latter more than offset the costs of maintaining nature, local residents will be incentivized to sustainably manage forests and wildlife. For this to be possible, locals must be owners of their surroundings and must be able to decide what to do with their property rather than environmental lobby groups who, through the state, employ force in imposing their views on local communities. In the mainstream approach, economic compensation is almost never adequate and green ideologists seem to be blissfully ignorant of the material, social and psychological costs imposed on local communities. Moreover, their solutions tend to be ineffective, costly and dismissive of local interests. Tesso Nilo is a prime example of the failure of the mainstream approach. As can be expected from any deprivation of economic benefits, local communities never condoned the creation of the national park and continued to defy the authorities, e.g. by poisoning elephants and removing demarcation poles. Popular anger even reached a point where murder and violence occurred. Around two thirds of the national park have been destroyed, corruption among the authorities themselves has been alleged and the latter know only one solution: more public finance. Thus, despite substantial sums of public finance, the results are devastating. International donors should free themselves from the mainstream rhetoric and look for empirical examples of real success. They will find that outcomes are contingent on the support from local communities and that the best way to achieve results is not through opposing the economic interests of these communities but through supporting them. This merely requires the reversal of public property to private property and a legal regime that strongly defends private property rights. In short, by ensuring that local residents are not the victims of nature conservation but its beneficiaries, chances are that forests and wildlife will be effectively protected and social conflict reduced to a minimum.

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