conditions, those with resources rights tend to maximize their short term use to capture the 

largest benefit stream in the shortest amount of time while their rights still hold.  

Uncertainty surrounding resource allocation policies may be spatial, temporal or both.  First, it is 

not always sufficiently clear where exactly the forest management unit is (principally a matter of 

boundaries), nor who has formal and informal access to it. Second, forest managers face 

uncertainties about how long the access rights will last.  These uncertainties increase risk and 

favor short term exploitation, and may include (NRMP Report No. 58):  

Inadequate infrastructure development (e.g., temporary roads and bridges) 

Inadequate efforts to reduce logging impacts to allow adequate second harvest 

regeneration 

A minimalist approach to community relations 

Low interest among local communities in preserving forest functions.   

Some of the policy constraints to resolve resource allocation uncertainties are concerned with: 

Concession licensing 

Industrial plantations and contested production forest boundaries 

Absence of full forest management rights for local communities. 

2.6.1  Concession Licensing  

Contracts concerned with timber concession licensing rights extension must first be considered.  

Over 83% of West Kalimantan concessions, for example, considered their extension option 

when their licenses expired prior to Repelita V.   The selected HPH concession's assessment of 

the value of remaining production forest reflected the perceived profitability of remaining forest 

areas even with infrastructure already in place.  An extension to the concession enabled the 

HPH to harvest the remainder of its allowable production areas.  Yet, only four HPH's in the 

province had applied for an extension in 1992, while 87% had already ceased operations or 

planned to do so when there lease expired (Curran 1992). 

The 20 year concession license was adopted to allow assessment of the previous lease before 

MoFr would grant a renewal or extension.  Criteria for the review and renewal process remained 

unclear due to the lack of transparency in the process and the lack of clear objectives.  Despite 

full compliance, no concessionaire can guarantee that their 20 year license will be renewed.  

The concessions' limited interest in extending operating licenses supported the view that the 

majority of concessions were operating for short term gains available within their existing 

contracts. Only 12% of West Kalimantan's concession land area could be considered 

acceptably managed according to prevailing forestry regulations.  The causes of this scenario 

were linked to uncertain resources rights and capital investments with 5 7 year life spans 

(Curran 1992). 

Because of these license renewal uncertainties, no serious attempt was made to conduct long 

term planning for future cutting cycles.  Infrastructure, such as transport systems and camps, is 

designed for short term use while harvesting practices place greater emphasis on reducing their 

costs rather than reducing forest damage. The relationship between communities and 

concessionaires also typically deteriorates during the latter half of the 20 year period.  Because 

it faces little potential risk in penalties, a concession can avoid its local community relationship 

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