Deforestation in Indonesia involves the long-term loss of forests and foliage across much of the country; it has had massive environmental and social impacts. Indonesia is home to some of the most biologically diverse forests in the world and ranks third in number of species behind Brazil and the Democratic Republic of Congo. As late as 1900, Indonesia was still a densely forested country: forests represented 84 percent of the total land area. Deforestation intensified in the 1970s and has accelerated further since then. The estimated forest cover of 170 million hectares around 1900 decreased to less than 100 million hectares by the end of the 20th century. In 2008, it was estimated that tropical rainforests in Indonesia would be logged out in a decade. Of the total logging in Indonesia, up to 80% is reported to be performed illegally.
Large areas of forest in Indonesia have been cleared by large multinational pulp companies, such as Asia Pulp and Paper, and replaced by plantations. Forests are often burned by farmers and plantation owners. Another major source of deforestation is the logging industry, driven by demand from China and Japan. Agricultural development and transmigration programs moved large populations into rainforest areas, further increasing deforestation rates.
Logging and the burning of forests to clear land for cultivation has made Indonesia the world's third largest emitter of greenhouse gases, behind China and the United States. Forest fires often destroy high capacity carbon sinks, including old-growth rainforest and peatlands. In May 2011, Indonesia declared a moratorium on new logging contracts to help combat this. This appeared to be ineffective in the short-term, as the rate of deforestation continued to increase. By 2012 Indonesia had surpassed the rate of deforestation in Brazil, and become the fastest forest clearing nation in the world.
The Indonesian archipelago of about 17,000 islands is home to some of the most biodiverse forests in the world. In 1900 the total forest represented 84% of the total land area. By 1950 plantations and smallholder plantings of tree crops still only covered a small area. The forest cover by that time is estimated to 145 million ha of primary forest and another 14 million ha of secondary and tidal forest. In the early 1970s Indonesia used this valuable resource to its economic benefit with the development of the country's wood-processing industries. From the late 1980s to 2000, production capacity has increased nearly 700% in the pulp and paper industries, making Indonesia the world's ninth largest pulp producer and eleventh largest paper producer.
The rate of deforestation continues to increase. The 2009 State Environment Report launched by President Susilo Bambang Yudhoyono revealed that the number of fire hotspots rose to 32,416 in 2009 from only 19,192 in 2008. The Environment Ministry blamed the increase on weak law enforcement and a lack of supervision from local authorities, with land clearance as the primary cause of the fires. Between 1990 and 2010 20% of the forest area in Indonesia had been lost (24 million ha) and by 2010, only 52% of the total land area was forested (94 million ha). Even despite a moratorium on new logging contracts imposed in 2010, the rate of deforestation continued to increase to an estimated 840,000 hectares in 2012, surpassing deforestation in Brazil.
Indonesia's lowland tropical forests, the richest in timber resources and biodiversity, are most at risk. By 2000 they have been almost entirely cleared in Sulawesi, and predicted to disappear within few years in Sumatra and Kalimantan.
In Sumatra tens of thousands of square kilometres of forest have been cleared often under the command of the central government who comply with multi-national companies to remove the forest. In Kalimantan, from 1991–2014, large areas of the forest were burned because of uncontrollable fire causing atmospheric pollution across South-East Asia.
A joint UK-Indonesian study of the timber industry in Indonesia in 1998 suggested that about 40% of throughput was illegal, with a value in excess of $365 million. More recent estimates, comparing legal harvesting against known domestic consumption plus exports, suggest that 88% of logging in the country is illegal in some way. Malaysia is the key transit country for illegal wood products from Indonesia.
An estimated 73 percent of all logging in Indonesia is believed to be illegal. Most of the methods adopted for deforestation in Indonesia are illegal for a multitude of reasons.
Private corporations, motivated by economic profits from local and regional market demands for timber, are culpable for deforestation. These agro-industrial companies often do not comply with the basic legal regulations by inappropriately employing cost effective yet environmentally inefficient deforestation methods such as forest fires to clear the land for agricultural purposes. The 1999 Forestry Law states that it is essential for companies to be endorsed by authorities in respective regions with an IPK permit, a timber harvesting permit, for legal approval of their deforestation activities. However, many of these corporations could circumvent this red tape, maximize revenue profits by employing illegal logging activities as lax law enforcement and porous law regulations in large developing countries like Indonesia undermine forestry conservation efforts.
In the social landscape, small-scale subsistence farmers in rural areas, who received minimal education, employ a basic method of slash-and-burn to support their agricultural activities. This rudimentary agricultural technique involves the felling of forest trees before a dry season and, subsequently, the burning of these trees in the following dry season to provide fertilizers to support their crop activities. This agricultural practice is repetitively employed on the same plot of land until it is denuded of its nutrients and could no longer suffice to support agricultural yields. Thereafter, these farmers will move on to occupy another plot of land and continually practice their slash-and-burn technique. This contributing social factor to deforestation reinforces the challenges faced by forestry sustainability in developing countries such as Indonesia.
On the political front, the Indonesian governmental role in curbing deforestation has largely been criticized. Corruption amongst local Indonesian officials fuels cynicism with regard to the governmental clampdown on illegal logging activities. In 2008, the acquittal of a proprietor for a timber firm, Adelin Lis, alleged for illegal logging further galvanized public opinion and drew criticisms at the Indonesian political institution. On the other hand, the Indonesian government grapples with the management of deforestation with sustainable urban development as rural-urban migration necessitates the expansion of cities. However, the lack of accountability to deforestation with pertinence to transmigration projects undertaken by the Indonesian government officials illustrates minimal supporting evidence to testify to considerations for forestry sustainability in their development projects. This further augments scepticism in the Indonesian government's credibility in efficiently and responsibly managing their urban development projects and forestry conservation efforts.
Efforts to curb global climate change have included measures designed to monitor the progression of deforestation in Indonesia and incentivize national and local governments to halt it. The general term for these sorts of programs is Reducing Emissions from Deforestation and Forest Degradation (REDD). New systems to monitor deforestation are being applied to Indonesia. One such system, the Center for Global Development's Forest Monitoring for Action platform currently displays monthly-updating data on deforestation throughout Indonesia.
On 26 May 2010 Indonesia signed a letter of intent with Norway, to place a two-year moratorium on new logging concessions, part of a deal in which Indonesia will receive up to $US1 billion if it adheres to its commitment. The accord was expected to put curbs on Indonesia's palm oil industry and delay or slow plans for the creation of a huge agricultural estate in Papua province. Funds will initially be devoted to finalising Indonesia's climate and forest strategy, building and institutionalizing capacity to monitor, report and verify reduced emissions, and putting in place enabling policies and institutional reforms. Norway is going to help Indonesia to set up a system to help reduce corruption so that the deal can be enforced. The two-year logging moratorium was declared on 20 May 2011. The moratorium was extended by another two years in 2013.