Decentralisation has involved a massive reform of Indonesian government that has profoundly affected every area of political, social, economic and even environmental life. As many of the chapters in this book illustrate, the process of decentralisation has been both wrenching and complex. The transfer of political and financial authority to regional governments has occurred very rapidly. Many of the changes in governance have been driven by ad hoc decisions made at the local level rather than by carefully considered central government policies. The process has been marked by contentious decisions and by conflict between all levels of government, with each defending its own political and economic interests. Nowhere has the disorderly and sudden nature of the changes brought about by decentralisation been more apparent than in the management of Indonesia's forestry resources.

This chapter attempts to present a preliminary analysis of the impact of decentralisation on the forestry sector. It highlights some of the important trends in forestry activities at the local level since the inception of the decentralisation laws and provides some illustrations of how the transfer of forestry authority is being played out between the national government and, in particular, the districts.

The analysis suggests that decentralisation has profoundly affected the course of forest management. Almost everywhere the picture is the same: of local governments, motivated by necessity and opportunity, attempting to generate revenue from forest resources without adequately considering the social and environmental consequences. As a result, the impact of decentralisation on the environment has been negative, at least so far. In addition, it appears that local people may gain only limited short-term benefits from timber production. It should be noted at the outset, however, that because the forestry sector in Indonesia is so complex, with many trends and changes being unique to particular localities, the account in the following pages captures only some of the important new trends and issues, and cannot be considered to be a complete account of forestry under decentralisation.