Indonesia Profile


Indonesia is one of the three largest tropical forest countries in the world, with 131 Mha of forests, or approximately 68 per cent of the country’s land area as of 2011 (Ministry of Forestry 2011). Emissions due to land use change have made Indonesia among the world’s top three greenhouse gas emitters, with 37 per cent of emissions due to deforestation and 27 per cent due to peat fires (National Council on Climate Change 2010).

Recent analyses of high-resolution satellite data show that Indonesia lost more than 6 Mha of natural forest between 2000 and 2012, with an increase in annual forest loss over this period (Margono et al. 2014). Deforestation was highest in 2012, the last year of the study. In that year, for the first time, a higher percentage of forest was lost in Indonesia than in Brazil, making Indonesia the new number one country in the world for tropical deforestation (though Brazil still maintains a higher rate of deforestation in all forest categories). The new figures contrast with the Indonesian government’s claims that deforestation has been declining; part of the reason for the discrepancy is that the government only measures loss in areas designated as part of the “forest estate” (Mongabay 2014b).

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Over the last 20 years, deforestation has been driven predominantly by the expansion of commercial agriculture, especially of monoculture oil palm and forest plantations. Other drivers of deforestation include logging (both legal and illegal), infrastructure development (including roads), aquaculture, small-scale and subsistence agriculture, forest fires, and, increasingly, mining (Indrarto et al. 2012).

BOX 1: Studies Estimating Forest Loss in Indonesia due to Oil Palm and Timber Plantations

  • Between 1982 and 2007, 36 per cent of the forest in Riau Province on the island of Sumatra—the province with by far the greatest area of recent deforestation in Indonesia (MOF 2011)—had been cleared for oil palm, and 24 per cent had been cleared for timber plantations (Uryu et al. 2008). A further five per cent had been cleared relatively recently (and thus not yet planted with crops), but may also been cleared for oil palm or timber plantations. Additional forest (less than 16 per cent, approximately) had been cleared for other industrial agriculture, such as rubber and coconut plantations. Thus, 81 per cent of all forest loss may potentially have been the result of clearing for commercial agriculture. A more detailed examination by the same study of deforestation within the Tesso Nilo-Bukit Tigapuluh-Kampar landscape (representing 55 per cent of Riau) found that between 1990 and 2007 timber plantations contributed 46.5 per cent of forest loss and oil palm plantations a further 34.2 per cent—a combined total of 80.7 per cent.
  • Based on areas planted at the time of measurement, oil palm plantations were responsible for approximately 57 per cent of deforestation between 2000 and 2010 in Indonesian Borneo (Kalimantan) (Carlson et al. 2013). The indirect effects are likely to have been much more extensive, however. An earlier study, covering just one of the four provinces of Kalimantan, found that 93 per cent of deforestation between 1989 and 2009 was due to forest fires (Carlson et al. 2012). While only a small proportion of this land had been planted with oil palm at the time of the study, other evidence suggests that up to 80 per cent of fire-related deforestation in Indonesia can be attributed to plantation development (FWI/GFW 2002), leading to a backlog of unused land (Boucher et al. 2011).
  • Examining deforestation over nearly the whole of Indonesia during 2000 to 2010, Abood et al. (2014) found that 30.1 per cent had occurred within mapped oil palm and timber plantation concessions. The total included 12.8 per cent in areas solely licensed for timber plantations, 11 per cent in areas solely licensed for oil palm plantations and 6.3 per cent in “mixed concessions” (usually areas licensed for oil palm that overlap with areas also licensed for logging or mining). The study did not seek to estimate the drivers of forest lost outside the boundaries of concessions; for example, as a result of illegal encroachment or fires started within concessions that then burn, uncontrolled, outside the concession; nor did the study seek to estimate the proportion of forest outside such areas lost as a result of other commercial agriculture. A separate study by Greenpeace (2013a), using a similar methodology, found that 24 per cent of deforestation between 2009 and 2011 took place within oil palm concessions.

Forest Conversion for Commercial Agriculture and Associated Exports

Though there is general consensus that commercial agriculture (particularly oil palm and timber plantations) is the largest driver of deforestation in Indonesia, there have been relatively few attempts to put a firm figure on its importance (see Box 1). One complicating factor is the common (yet illegal) use of fire by oil palm and timber plantation developers to clear land of forest (see Box 2). These fires regularly extend well beyond the boundaries of the intended area, and it is often difficult to attribute the cause of the initial fire. Another complicating factor is that, within licensed areas, clearance of forest may occur faster than planting, leaving large areas deforested but not planted (Grieg-Gran et al. 2007). In some cases, the developer may have used the plantation license to gain access to the timber with no intention of planting (FWI/GFW 2002); in others, planting may simply be lagging behind clearance (Boucher et al. 2011). Because of such complicating factors, deforestation caused by commercial agriculture is likely to be much greater than the total area of land actually planted. Unfortunately the former is more difficult to measure than the latter.

Only one of the studies in Box 1 included other types of commercial agriculture beyond the two main drivers (oil palm and timber or pulp plantations). Examination of FAOSTAT data for the area planted with alternative crops suggests that their contribution may be substantial, however. Between 2000 and 2010, only 45 per cent of the increase in the total area of cropland (which does not include industrial timber or fiber plantations) in Indonesia was attributed to oil palm. The area under other crops increased by 4.7 Mha between 2000 and 2012 (FAOSTAT 2014). If even a small proportion of this expansion was at the expense of forests, it would represent a significant proportion of the total of 6 Mha of forest lost during that period and add substantially to the contribution to deforestation of commercial agriculture (i.e., beyond that measured in the studies in Box 1 as being attributed solely to oil palm and timber plantations).

Most of the conversion timber from natural forests, as well as the palm oil and plantation-grown wood produced at the expense of natural forests in Indonesia, are destined for export. In 2011, Indonesia exported between 70 and 80 per cent of the palm oil the country produced. Most of the plantation-grown wood produced in Indonesia is used in the production of pulp and paper. This study has calculated that in 2011, Indonesia exported around half of all the pulp it produced and also exported around half of the paper made from the pulp that was consumed domestically. Combined, these figures suggest that 75 per cent of plantation wood used in the manufacture of pulp is exported.

According to official statistics, Indonesia exports the majority of the timber it produces. In 2010, for instance, the Ministry of Forestry reported total timber production of 42 million m3, while total wood product exports reported the same year (in roundwood equivalent terms) were more than 40 million m3. In reality, there is a large volume of illegal wood production that goes unreported (Blundell 2014). Indonesia consumes an estimated 10 million m3 of timber domestically (Klassen 2010), which (when considered alongside imports of 9 million m3 in 2010) implies that the real proportion of total wood supply (including natural forest and plantation wood) exported is around 80 per cent. The proportion of natural forest conversion timber exported from natural forests is assumed by this study to be the same as the overall figure.

The importance of conversion timber in the legal supply is also increasing. Official figures from 2010 state that almost three-quarters of wood harvested that year from natural forests was from conversion (mostly from forests cleared for new timber plantations), up from just 6 per cent eight years earlier. The actual volume and proportion of conversion timber is almost certainly much higher, because a great deal of forest conversion is illegal and the timber harvested is likely unrecorded in official figures (Blundell 2014). Estimates of real (recorded and unrecorded) conversion wood production (based on the area of new planting of timber and oil palm and assuming a conservative average volume of salvage production per hectare) suggest the true figure for conversion timber may be as much as 85 per cent of the timber produced from natural forests. These estimates also suggest that the proportion of timber coming from conversion increased a lot earlier than the official figures suggest. Recent analysis indicates that at least 75 per cent of forest conversion in Indonesia is likely illegal; combining this with the estimate of real conversion production implies that at least 60 per cent of all tropical wood produced in Indonesia is from illegal conversion.

Illegalities in Conversion

The main types of illegality documented in relation to the conversion of forests for commercial agriculture (defined in this study to include timber plantations) are corruption in the issuance of relevant licenses and conversion of forests without (or in advance of) all required permits.

Former governors of two of the four provinces most badly affected by deforestation have been sentenced to long jail terms for the corrupt issuance of licenses to convert forest to oil palm and timber plantations (see Box 3 for more information and evidence regarding such corruption). The most common failure in properly issuing forestry and environmental permits (the latter known as an AMDAL in the Indonesian acronym). When a proposed plantation is located on forest land, Indonesian regulations require that the land is formally “released” from the forest estate before conversion can begin; once this is accomplished, a separate permit (often a clearing permit; IPK in the Indonesian acronym) that licenses the felling of commercially valuable trees may be required. It is very common for companies to fail to obtain either of these documents. A 2014 study by EIA found that local officials frequently violate environmental regulations in order to expedite the permit process (EIA 2014).

Aside from these broad categories of illegality, there are numerous documented instances of companies clearing forest outside concession boundaries (including in protected areas), clearing in prohibited zones within license areas (such as areas of deep peat or river buffers), the illegal use of fire to clear forest (see Box 2), the felling of protected tree species, and the conversion of more than the maximum 90 per cent of natural forests within each concession.

Most information that one can use to attempt to measure the overall extent of illegality comes from independent studies or government audits covering certain types of permits within specific districts or provinces. Most suggest levels of illegality of at least 70 to 80 per cent (see sections on timber plantations and oil palm below). There are two additional sources at a more holistic level, both of which also suggest a level of illegality in excess of 80 per cent.

The first such national-level estimate of potential illegality comes from a comparison of volumes of timber officially reported as having originated from the conversion of forests for plantations with an independent estimate of the actual volume of timber that was likely to have been produced (using official data on areas planted, and assumptions regarding the volume of salvage timber produced per hectare). The study, by Forest Trends, estimated (based on a conservative assumption of an average of 38 m3 harvested per hectare during forest clearance) that 258 million m3 of conversion timber was likely to have been produced in Indonesia through clearance for timber and oil palm plantations between 2000 and 2010, as compared with just 46 million cubic meters of conversion timber officially reported as having been used in mills. The analysis suggests that if used by these mills, then at least 82 per cent of timber production from conversion for oil palm and timber plantations in Indonesia during that period was unreported and therefore illegal (Blundell 2014).

The second national-level estimate relates to the legal status of Indonesia’s forests and the issuance of licenses by the relevant government ministries for development. As of 2012, only 11 per cent of Indonesia’s 131 Mha “Forest Zone” had been formally gazetted (Wells et al. 2012), a legally required process whereby ownership of the land is clarified and boundaries demarcated. This calls into question the legality of licenses issued outside the gazetted area (Colchester et al. 2003), which has recently been further underlined by two Constitutional Court decisions. In February 2012, the first of these court decisions reinforced the legal basis requiring that forestland must be gazetted (Wells et al. 2012), and the second decision (in May 2013) ruled that Indigenous Peoples’ customary forests should not be classified as “state forest” (AMAN 2013). One result of the failure to properly recognize indigenous and other local communities’ customary tenure has been widespread conflicts between local people and plantation developers. In 2012, Indonesia President Yudhoyono’s office received reports of 8,495 agrarian conflicts, of which 2,002 were “likely to erupt into violence” (Human Rights Watch 2013).

BOX 2: Illegal Use of Fire to Clear Land for Oil Palm and Timber Plantations

It is illegal in Indonesia to use fire to clear forests, and yet every year, satellite data pinpoint hundreds of fire “hotspots” within areas of forest licensed for the development of oil palm and timber plantations. Examining fire hotspots that were detected in Riau between 1997 and 2007, 80 per cent of the fires were associated with oil palm or timber plantations (Carlson et al. 2013). More than 60 per cent of the land associated with fire in 2006 had been planted with oil palm or acacia a year later (Uryu et al. 2008). Global Forest Watch (2002) estimated that 80 per cent of forests lost to fires nationwide during the peak period in 1997 to 1998 could be attributed to plantation development (FWI/GFW 2002). More recently, the World Resources Institute (WRI) reported that the fire events in Sumatra in June 2013 were mostly occurring within areas licensed for conversion (Sizer 2013).

Examination of all relevant published reports of allegations of illegalities in oil palm development in Indonesia shows that fire hotspots have been identified within almost every Indonesian oil palm concession. Though locating hotspots within concessions is easy, it is very hard to prove that these fires were started deliberately by the company to clear forest. Indeed, a study of a sample area in Riau that burned in the spring of 2014 showed that most fires that occurred within concessions either started outside those concessions or on land occupied by local or migrant communities within the concessions (Gaveau 2014). In the majority of published cases, however, most hotspots were found to occur at the same time that forest was being cleared, with planting ensuing shortly thereafter. In a small number of cases, more concrete evidence has been uncovered by authorities and prosecutions brought.

Even if fires were not started by concessionaires, this does not absolve them of legal responsibility. Aside from prohibiting the deliberate lighting of fires, Indonesian legislation also requires oil palm concessionaires to prevent fires on land under their control, and to have plans and equipment in place to tackle fires that do start. Proving a lack of compliance with these rules is easier, and few plantations in which this issue has been independently assessed have been found to comply


Evidence Specific to Timber Plantations

Two companies, APP and APRIL, dominate the industrial timber plantation sector in Indonesia. They jointly control over 75 per cent of pulp production capacity (Barr 2007) and 3.5 Mha of timber plantation concessions (Barr 2010), and produce 80 per cent of Indonesia’s paper (Barr 2008). Investigations by the Indonesian government and NGOs over many years have documented widespread illegalities in natural forest conversion for timber plantations by both companies, including:

  • An Indonesian government audit report published in 2009 found that 19 pulpwood plantation licenses (out of an unknown number examined) had been issued illegally between 2002 and 2008; all of the companies subsequently supplied APP with conversion wood from the illegally licensed areas (BPK-RI 2009, cited in Greenomics 2011).
  • In 2012, Indonesia’s Ministry of Environment told reporters it was planning to bring a civil case against fourteen companies in Riau for illegalities in the conversion of forests for timber plantations; six of the companies are reportedly linked to APP and six to APRIL. Damages in the case are estimated at $225 billion. The case builds on evidence from a province-wide criminal police investigation that took place in 2007 (Mongabay 2012a).
  • In September 2013, the Indonesian government announced that five pulpwood suppliers had been named as suspects in relation to fires that ravaged Sumatra during the summer of 2013, leading to a regional smog crisis that made worldwide headlines. According to local NGOs, three of the named pulpwood producers are suppliers to APP, while another is a supplier to APRIL (Eyes on the Forest 2013a).
  • In 2013, Eyes on the Forest, a coalition of environmental NGOs, including WWF Indonesia and Friends of the Earth Indonesia, examined compliance with three key regulations by APP and APRIL’s suppliers in Riau province (where the majority of Indonesia’s pulp plantations are located) and found that:
    • 77 per cent of APP’s conversion during 1985 to 2012 was “legally questionable” in one or more ways, for example: within areas not zoned for conversion (35 per cent), in areas of peat more than 3 meters deep (34-44 per cent), and/or in excess of the maximum 90 per cent conversion allowed in each individual concession (4 per cent) (Eyes on the Forest 2013);
    • conversion by companies supplying APRIL was also “legally questionable:” in areas of deep peat (40-50 per cent) and/or in forests not zoned for conversion (46 per cent);
    • a Greenpeace investigation in 2011 found that large volumes of legally protected ramin (Gonystylus spp.) was being processed in APP’s Indah Kiat pulp mill (Greenpeace 2012). This followed the discovery the previous year of ramin fiber in paper products made in Indonesia on sale in the US (WRI 2010).
    • In 2012, Indonesia’s Forestry Ministry started an official government investigation into Greenpeace’s findings and later confirmed that two APP group companies had supplied the mill with ramin logs (Greenomics Indonesia 2013);

In February 2013, APP announced a total moratorium on natural forest conversion, pledging to only develop non-forested areas (rather than High Conservation Value (HCV) and High Carbon Stock (HCS) areas) to ensure that forest peatland is protected and to implement a set of legal consultation principles to respect indigenous and local communities’ customary rights (APP 2013). APP’s fiber supply should now be reliant on plantation wood grown on land it previously deforested, or on non-forested land. In contrast, as of 2013 APRIL continued to source around two-thirds of its wood fiber from logging of natural forests (Greenpeace 2013b).

Evidence Specific to Oil Palm Plantations

In 2011, an Indonesian government task force announced the results of a province-wide assessment of permit compliance by oil palm concessions in Central Kalimantan. The task force found that 81 per cent of oil palm plantations were operating without required Forest Relinquishment permits from the Ministry of Forestry; the majority of these also lacked IPKs (Greenomics 2011). A separate investigation across all of Indonesian Borneo, published the following year, found that two-thirds of mining and plantation companies were operating without required environmental impact assessments (EIA/Telapak 2012).

In October 2012, the Indonesian REDD+ Task Force announced that it was working with various authorities to pursue nine forest crime cases against oil palm plantations (Lestari Post 2012). The crimes involved converting forest without a conversion permit (IUP), clearing forest within moratorium areas, and land clearing through burning. Three oil palm concessions are also among those named as suspects in relation to the forest fire crisis of the summer of 2013. Two are apparent repeat offenders: one of these companies was convicted of illegally clearing forest using fire ten years earlier (AFP 2003), while another was previously alleged to have done so.

The extent of illegality has been further confirmed by a recent in-depth study of compliance by all oil palm plantations in one district in Central Kalimantan commissioned by Forest Trends and Chatham House (Aidenvironment, forthcoming). The study collected and examined official permits and maps, and compared these with satellite data to assess various aspects of legal compliance. The results (which indicate apparent violations, though these have yet to be proven in court) show that 20 of the 35 oil palm plantations (57 per cent) involved permits being issued improperly and/or without other required permits (such as AMDALs). Twelve of the 33 (36 per cent) active plantations were found to have begun clearing forest before receiving all necessary permits, while 20 (61 per cent) were also found to have cleared forest outside concession boundaries. Of the two oil palm concessions in the district with forest on deep peat, one had converted 85 per cent while the other had converted 100 per cent of the peat area. Two concessions also illegally overlapped with and had cleared forest within a National Park. Of a total of 35 plantations that were assessed against one or more of these aspects of legality, 32 (89 per cent) were found to be associated with at least one apparent illegality, while 64 per cent were associated with two or more (AidEnvironment, forthcoming).

In addition to the general evidence above, there have been numerous individual documented case studies of alleged illegalities in the conversion of forest for oil palm plantations in Indonesia. Forest Trends has collated and analyzed all available published evidence and allegations (up to the end of 2013). While not exhaustive (see Figure 10 for a full list of sources), the collated information nevertheless includes cases associated with 100 separate plantations, or around 10 per cent of the total number of plantations in the country. In many cases, multiple breaches have been exposed within the same plantation. In some cases, illegalities have been exposed in specific concessions on multiple occasions. The most common illegalities documented are clearance without all required permits (50 cases), evidence of use of fire to clear forest (50 cases), and improper license issuance (48 cases) (Figure 10). Oil palm companies were found to have begun converting forests without having an approved Environmental Impact Assessment (AMDAL) in 26 cases, which would render irregular all subsequent licenses issued because these other permits are not supposed to be issued before the AMDAL is approved. It is commonly reported that officials sign off on permits without or in advance of the previous permit having been issued.

A 2014 study by Eyes on the Forest traced palm oil grown in the Bukit Batabuh tiger corridor in Riau to the mills of major global palm oil traders. The palm oil originated in smallholder concessions that violated of spatial plans and various agricultural and forestry regulations (Eyes on the Forest 2014). A report published in the same year by EIA documented companies violating a range of forestry and environmental laws while opening forest for palm oil concessions in Central Kalimantan (EIA 2014).

Evidence Relating to Other Crops

Though this report focuses on oil palm and industrial timber plantations, other crops may also be important, including coffee, cocoa, and sugarcane. Case studies demonstrate illegalities in forest conversion for these crops too. For instance, WWF Indonesia (2007) found that 18 per cent of Bukit Barisan Selatan National Park in Sumatra had been illegally degraded or deforested for growing coffee, and concluded that at least 10 per cent of all coffee exports from that part of Sumatra were illegally produced. The coffee was documented as being exported to the US, Europe, and Japan. Meanwhile, the legality of numerous licenses issued recently for largescale food estates (for sugarcane, maize, soy, and other plantation crops including oil palm) covering more than 2.5 Mha of mostly forested land in Merauke district of Papua province has been called into question by civil society and community organizations (Forest Peoples Programme 2013), including Indigenous Peoples living in Merauke who have taken their complaints to the United Nations.

BOX 3: Corruption Relating to Conversion of Forests for Oil Palm and Timber Plantations

A number of major cases have exposed the extent of corruption in the issuance of licenses for conversion of forests to oil palm and timber plantations in Indonesia. Indeed, most of the $100 million in assets recovered by the Indonesian Corruption Eradication Commission (Komisi Pemberantasan Korupsi, or KPK, a government agency established to fight corruption) has come from the forest sector, and most of this has come from illegal conversion cases (U4 2011).

  • Riau (Sumatra): In March 2014, the former governor of Riau was jailed for 14 years for the illegal issuance of permits to nine companies, all of them suppliers to Asia Pulp & Paper (APP 2014; Mongabay 2014a). The head of Riau’s Pelalawan district had previously been jailed for issuing timber plantation licenses illegally between 2001 and 2006, including to companies owned by members of his family (Dermawan et al. 2011). The head of Riau’s Siak District has also been jailed for timber plantation-related corruption (Tempo 2012). Ten of twelve wood suppliers for one of the largest pulp mills (Asia Pacific Resources International Limited (APRIL)) operating in the Kampar Peninsula obtained their licenses from the heads of these two districts (Eyes on the Forest 2012). APRIL suppliers received annual cutting licenses from three Riau Forestry Agency chiefs who have since been jailed for corruption (ibid.). The Provincial Forestry Department Head was also jailed in connection to the case, which is estimated to have caused losses to the state of $131 million (U4 2011).
  • East Kalimantan: In 2007, a company was found to have illegally obtained through bribery 11 oil palm plantation licenses covering 147,000 ha between 1999 and 2006, then clear-felled the forest for timber but never planted oil palm. The company was fined $36 million, and the Governor of East Kalimantan and a senior provincial forestry official were jailed, along with the company’s director (Tempo 2008).
  • Central Sulawesi: In 2013 a prominent businesswoman was jailed for two years for paying a $300,000 bribe to a district chief in Central Sulawesi in exchange for an oil palm license issued in contravention of national legislation (Antara News 2013). The district chief was in turn jailed for seven and a half years (Jakarta Globe 2013).

In addition to the corrupt issuance of licenses, there has been a long history of misuse of the Indonesian Reforestation Fund, a subsidy program intended to support development of timber plantations, from which US$5.2 billion was embezzled in the mid-1990s (Barr et al. 2010). Among those convicted since is (former President) Suharto’s half-brother, who was found to have fraudulently claimed that his company had planted almost twice the area of forest that it had (Jurgens et al. 2005). Corruption and misuse of the Reforestation Fund remained a problem in the post-Suharto era (Barr et al. 2010).

In 2012, the KPK established an Action Plan to address the widespread corruption in the forest sector, and obtained a commitment from 16 government ministries/agencies to implement the Plan through the signing of a Memorandum of Understanding (Government of Indonesia 2013).



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Tempo. 2012. “Empat Tahun Tersangka, Bupati Kampar Baru Ditahan.” Tempo Politik, January 24

U4. 2011. U4 Workshop Report: Public Integrity Approaches for the Forest Sector. Hotel Mandarin Oriental, Jakarta, Indonesia, November 9-10

Uryu, Yumiko, Claudius Mott, Nazir Foead, Kokok Yulianto, Arif Budiman, Setiabudi, Fumiaki Takakai, Nursamsu, Sunarto, Elisabet Purastuti, Nurchalis Fadhli, Cobar Maju Bintang Hutajulu, Julia Jaenicke, Ryusuke Hatano, Florian Siegert, and Michael Stüwe. 2008. ”Deforestation, Forest Degradation, Biodiversity Loss and CO2 emissions in Riau, Sumatra, Indonesia: One Indonesian Province’s Forest and Peat Soil Carbon Loss over a Quarter Century and its Plans for the Future.” WWF Indonesia Technical Report, Jakarta, Indonesia.

Wells, Philip, Neil Franklin, Petrus Gunarso, Gary Paoli, Tiza Mafira, Dimas Riyo Kusumo, and Ben Clancy. 2012. “Indonesian Constitutional Court Ruling Number 45/PUU-‐IX/2011 in relation to Forest Lands: Implications for Forests, Development and REDD+.” Daemeter Consulting, West Java, Indonesia. 

WWF Indonesia. 2007. “Gone in an Instant: How The Trade In Illegally Grown Coffee Is Driving The Destruction Of Rhino, Tiger and Elephant Habitat.” WWF Indonesia, AREAS (Asian Rhino and Elephant Action Strategy), Bukit Barisan Selatan Programme, Jakarta, Indonesia


This summary was last updated in September 2016. For more recent information, please see news on Indonesia here.