Despite a moratorium by the Indonesian government rejecting new logging concessions since May 2011, Indonesia saw 840,000 hectares of forests cleared in 2012 and deforestation levels continue to increase at an alarming rate every year. International experiences have shown that chances of sustainable long-term forest management improve when the ownership and management of forest resources remain with local communities. Once they have secured long-term access to resources through property rights they become confident enough to widen their time horizon and to invest in sustainable forestry practices. However, Indonesian forests are owned by the national government, which then delegates management rights to local levels of government. The ensuing struggle over control of forest resources between all levels of government caused weak legal and regulatory frameworks and a major barrier for sustainable forest management. Considering these complexities of forest governance, there is no simple way towards sustainable forest management and to the prevention of further deforestation. Nevertheless, several case studies from Indonesia and abroad can serve to inspire the following policy recommendations in Indonesia. They are based on the existing Indonesian system of forest classification and allowable land uses. For-profit businesses should be allowed to build and manage eco-tourism facilities in conservation forests (hutan konservasi). These activities will support the preservation of ecosystems and biodiversity. Protection forests (hutan lindung) are meant to prevent floods, control erosion, and maintain soil fertility. For their sustainable management, usufructuary rights should be granted to local communities allowing them to manage these forests and giving them limited rights to access forest resources. Finally, production forests (hutan produksi), where timber and non-timber products can be extracted, should either be handed over to local communities or be privatized. The national government should move away from approaching those forest areas as a source of national state revenues. Instead, it should allow these resources to support local income generation and growth.