Indonesia's forest resource base is still vast, but it faces many threats that put its long-term sustainability in jeopardy. These include illegal logging; forest fires; deforestation through land encroachment; wasteful logging and processing; structural deficiencies and inefficiencies in forest industries; the indebtedness of forestry enterprises; unsettled land claims; inefficiencies in public forest administration, in particular in the process of decentralization; an inadequate base of human resources; inadequate monitoring and evaluation; and a lack of effective governance. On the other hand, significant progress has been made in the establishment of certification systems and information on the management of concessions is becoming increasingly available.
- The estimated 68.5 million hectares of Indonesia's natural-forest PFE comprises 46.0 million hectares of production forest and 22.5 million hectares of protection forest. There are also about 2.50 million hectares of productive timber plantations.
- The security and integrity of the PFE are affected by several factors, of which forest fire and encroachment are among the most important.
- Illegal logging in the PFE (both production and protection) is widely held to be a major problem.
- The Ministry of Forestry is undertaking a review of concessions and their compliance with the Indonesian C&I. This process has shed light on the status of management in the production PFE.
- It is estimated that at least 2.94 million hectares of natural-forest production PFE and 1.36 million hectares of protection PFE are being managed sustainably.
- Some 12% of the land area of Indonesia has been designated as protected areas. However, information on the management of a large part of the protection PFE is scarce.
- Forestry is undergoing a process of decentralization that has proven difficult partly because of a lack of capacity at the decentralized levels of administration and partly because of disharmony in the policies of central and local governments.
- C&I for SFM have been developed for the country and a certification regime designed. About 275,000 hectares have so far been certified.
- The prescriptions for the management of production forests are conceptually sound but implementation has been weak. Over-capacity and structural imbalances in the wood-processing sector have exacerbated the situation.