Social Enterpreneur - Silverius Oscar Unggul

Silverius Oscar Unggul

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Forest conservation in Indonesia has taken place for the last four decades. The result has however been in the degradation of the natural forest resources and thus the potential loss of income for around 30 million people who live near the forest. In the conservation field, an economic incentive is therefore highly needed. Silverius is offering an alternative solution for millions of these people to gain long lasting benefits from practices of sustainable commercial community-based timber business.

The New Idea

Silverius Oscar Unggul, together with his organization JAUH of Southeast Sulawesi, has facilitated the villagers to be able to manage a timber enterprise for the existing forest resources. With this model he offers an alternative solution for people living by the forest to be able to become key players in the green business. Through a collective working mechanism that the community has set up, they are now able to manage a teak plantation spread over 300 ha of farmers’ land. After undertaking the preparatory activities for about two years, now the farmers are able to earn four times more than the amount they used to receive. This model has given the people an economic incentive and a stronger sense of ownership over the valued forest resources. Through the community-based timber enterprise, Silverius has unlocked the opportunity for local people to become the suppliers of environmentally-friendly timber.

This success in managing the timber enterprise has provided the community cooperative a chance to enter into the green timber industry. They hold a key role in the sustainable supply, processing and production through the value chain of the green industry. To Silverius, these sustainable practices are strengthened by an economic incentive the ecolabel certificate has given. In the timber processing industry more than 90% of the companies are currently in no way close to having the ecolabel certificate. Silverius has proved that community cooperatives are able to comply with all the requirements and obtain an international ecolabel certification from the SmartWood of the Forest Stewardship Council. With the timber production cap system that the ecolabelling applies, it even gives a higher economic incentive for each individual timber. A pilot program that has been implemented by the community cooperative in South Konawe District involving 300 cooperative members from 12 villages.

This successful endeavor led Silverius, his team and the community to put pressure on the Forestry Ministry in materializing the social forestry program policy. As planned, under the Forestry Ministry Decree, the people living in and around the forest will be given concessions to manage the state’s regulated productive forest. The plan is set to cover 38,959 ha of productive forest and involve 8,534 households or 17% of the total population in South Konawe District. Once this is all in place, Silverius envisions that the community cooperatives will play a key role in ensuring the sustainable forest management, not only in private land but more importantly in the state forests. Considering a great demand for the green timber nation and world wide, Silverius is currently working with his allies to spread his model throughout the country.


The Problem

Out of the 120 million ha of Indonesian forest more than 101 million ha are in critical condition and only 19 million ha are still virgin. If these practices persist, the Indonesian rainforest will disappear within 5-10 years. The speed of the forest conservation is incomparable with the excessive timber demand. The concession companies are hardly able to think about the need of the next generation. Many conservationists are more in favor of advocacy for policy change. In any circumstances, there has not been any chance for people living by the forest to manage the forest resources, let alone, seeing a chance to run a timber processing industry. Under the existing regulation, the people are only allowed to manage the non-timber forest products whereas timber, the most valued forest resources, is managed by the state and the private companies.

Unfortunately, the timber processing industry has been managed unsustainably. In meeting such a huge demand, many forest concessions exploited the forest timber products. Not to mention, many other illegal businesses who use the local people for their illegal timber supply. Unsurprisingly, illegal logging has contributed to two thirds of the forest destruction in Indonesia and has become among the highest in the world. Alternatively, pressure for a green business to the forest consumers and buyers such as in Japan, China and the United states has just been emerging. Only products that are legal and environmentally-friendly can enter their markets. This trend is then supported by the ecolabelling certification movement. Nevertheless, to date only 3 out of more than 100 timber processors in Indonesia have so far received certificates. Most of these companies are reluctant to process certification as it is expensive and many of them are still dealing with legal land disputes. In such a chaotic system, there has not been any effective monitoring mechanism to oversee the cap of quota system in serving the excessive timber demand.

At the field level, furthermore, unclear forest land ownership and unrecognized tenurial rights of the local people have perpetuated the problem. Tenurial conflicts, which involve the people, local and central government, and the concessionaires, have been the main obstacle in the realization of sustainable forest management in Indonesia. On paper the productive forest is shared among the state, private companies and the local community. The state government through many new program policies has otherwise started to involve local people in managing forest resources, however, only limited to the non-timber forest products. Whereas the timber processing industry is still given to the private and state-owned companies.




The Strategy

Silverius believes that the preparatory actions with the people count the most in building the timber enterprise. For this he facilitated the local people to organize themselves through a cooperative mechanism. A coordinating body functions to manage the institutional and forest area arrangement while a cooperative runs the business management of the commercial community-based timber industry. A year since they started to manage their community forest sustainably, each member of the cooperative has received RP 1,445,000 (US$160) for every cubic meter timber they sold in three months. This is four times more than RP 400,000 (US$40) per cubic meter they earned before. In addition to this, at the year end the cooperative shared the dividend of approximately RP 536,717 (US$60) with each member from the profit the cooperative has gained. This community timber business has also given impacts to the local government’s revenue. Through complying with five licensing requirements from the district government, the community cooperative has given income of about RP 98.000.000 (US$11,000) in three months.

This mechanism has given the community an economic incentive in order to become the key player in the whole industry. Silverius made the cooperative connected with the buyers to make the deals. And in order to maintain the supply the cooperative set up the timber production plan based on a survey over the potential teak available. In addition, the community makes an arrangement for the breeding, replanting and conducting a community participatory forest guard. The forest watch runs certain rules and reinforces them effectively and has therefore motivated 6 other neighboring villages to replicate. The cooperative has also set up a system that would guarantee the timber chain of custody. They just opened up a new sawmill business for their members. This new business besides serving their green business it also gives a new income for the cooperative. All of these endeavors have been supported by a partnership JAUH, the Cooperative and the TFT- Tropical Forest Foundation for ecolabel certification. The Cooperative facilitated the certification accessor, the SmartWood to conduct a feasibility study over the work of the community cooperative. Three months after the assessor team conducted the assessment the cooperative received the ecolabel certificate issued by the Forest Stewards Council (FSC) in May 2005. According to the FSC, the certificate is the first granted to a community cooperative in Southeast Asia. This certification procedures has made the community understand the values and have hands on experience in managing the timber forest sustainably.

This sustainable timber business has given the community the confidence in managing the upcoming state productive forest. As promised they will be given the concession for 38,959 ha of the state forest. For this they have made themselves prepared in managing the nursery and the replanting of ten seedlings for every tree cut down. The community is also expecting around 500.000 teak seedlings ready for the reforestation in the upcoming concession. To serve the regulation, the community has set up the long-term forest management plan and once they receive the concession they will develop the five-year and annual management plan. With this experience the community has become the learning centre for other villages from other islands. Silverius has joined the nation wide citizen-sector organization network to spread the model. As to him, in the next five to ten years the world market will demand for more ecolabel timbers. While running the sustainable commercial community-based timber business, the cooperative is spreading and maintaining the sustainable timber supply and engaging the buyers in the whole green business industry.


The Person

Silverius, a thirty five year old father of two young children was born and grew up in Kendari, Southeast Sulawesi. He was impressed and learned a lot from his parents’ stories when he was a child. He recalled that both his parents are very good in telling religious stories. Now, he does the same thing to his children but changed the religious stories to universal values. Since primary school he was one of the boy scout activists and was able to join the national jamboree. In high school he was active in the students’ organization and once became the president. His love for sports in basketball and tae kwon do of martial art has given him opportunity to participate in the national tournaments. In 1988 he was the youngest player in the pre-national tournament in Makassar, South Sulawesi.

When he was at university he felt his character was shaped and developed. Through his active involvement in the nature lover activities he learned in depth about the people of Indonesia. It was the time when his love and commitment for the environment and the people was nurtured. Unlike other nature lover groups who are simply exploring their interest in the environment, Silverius and his friends always found ways to be able to help the local people living surrounding the environment. For example, when he had a mount climbing activity he discovered a spring water. He and his friends then helped the community to build the clean water system. The basis of all of these activities is to confirm that Silverius is always happy and feels close to the people and acts as the connector amongst the people.

In 1998, immediately after his graduation from the agriculture faculty, he and his nature lover friends established Yascita, a citizen-sector organization promoting natural resource based economic development. During his university years and continuing at Yascita, he was always concerned by the environmental destruction in the region. He then was active in investigative activities to provide proofs against the illegal practices of the concessionary companies in Southeast Sulawesi. However, none of the local mass media would publicize the field findings as to them it was too risky. Challenged by this fact, in 1999 Silverius and his friends subsequently established a community radio called ‘the Voice of the Nature’ delivering information on natural resource management. Since its establishment until now this radio station is among the biggest and the most popular in the province. To give broader and effective impacts, in 2003, Silverius set up a local TV station, the only one in Indonesia ever developed by a citizen-sector organization with a very minimum seeded investment. He wanted to change people’s perception that developing a TV business is difficult and costs a fortune. For this he developed TV programs that are run by the people. Besides being efficient, Silverius also builds a sense of people’s ownership over the media. Having understood that addressing the environmental degradation needs a collective effort, Silverius together with other five local citizen-sector organizations, the Voice of Nature radio and the TV Kendari built a working network called JAUH in 2003. The mission of the organization is to promote the local people became the main actors in environmental conservation that gives an economic incentive.

source : Ashoka: Innovators for the Public
photo credit : Silverius Oscar Unggul