Ministry to Revise Regulation to Reinforce Mandatory Transition of PBPH to the Multi-Forestry Business Scheme

The Ministry of Forestry is finalizing amendments to Regulation of the Minister of Environment and Forestry No. 8 of 2021 on Forest Governance, Forest Management Plans Preparation, and Forest Utilization in Protected and Production (“PermenLHK 8/2021”). The proposed amendments will reinforce the obligation for holders of Forest Utilization Business Licenses (Perizinan Berusaha Pemanfaatan Hutan – “PBPH”) to transition from a single-business model to the Multi-Forestry Business (Multi Usaha Kehutanan – “MUK”) scheme. 

Ilham, Director of Forest Utilization Business Development at the Ministry of Forestry, stated that the obligation to transition to the MUK scheme will take effect upon the expiry of a license holder's Business Work Plan (Rencana Kerja Usaha – “RKU”). "For example, when the RKU of an existing license expires, the holder will be required to transition to the MUK scheme. Many of our policies are designed to encourage this transition because the objective is to optimize forest utilization," he said.

As part of the regulatory revision, the Online Single Submission – Risk-Based Approach (“OSS RBA”) system will also be updated so that it no longer accommodates applications based on a single-business model when business actors submit renewals of their RKU documents. Consequently, the transition to the MUK scheme will become an integral requirement of the business licensing process.

The amendments are intended to maximize the economic value of forest areas through business diversification. In addition to timber forest product utilization, PBPH holders will be encouraged to develop environmental services businesses, promote food security through silvopasture, produce biomass energy, and capitalize on carbon trading opportunities as part of a more productive and sustainable forest management framework.