Indonesia’s forests are simultaneously ecological systems, economic resources, and living territories for Indigenous and local communities. Despite growing recognition of Indigenous rights, conflicts over land and forest governance continue as industrial concessions expand across areas historically managed by communities. This article examines why the protection of Indigenous peoples remains structurally limited within Indonesia’s forest governance system. It focuses on tenure insecurity, the recognition of customary forests, criminalization, industrial concessions, and competing claims over community-managed territories. The article argues that the central problem lies not simply in insufficient legal recognition but in the institutional and political arrangements through which forests are classified, allocated, and governed. State-centered licensing systems can privilege commercial uses of forests while treating customary territorial claims as secondary or conditional. As a result, communities may face legal uncertainty, restricted access to resources, or criminalization when defending territories they have historically managed. Through a political-ecology and environmental-justice framework, the study examines the unequal distribution of authority over forests and the consequences of concession-based governance. It argues that meaningful forest protection requires strengthening tenure security, accelerating recognition of customary territories, ensuring free and meaningful participation, and reforming licensing systems. Protecting forests and protecting Indigenous rights should not be treated as competing objectives but as interconnected dimensions of ecologically sustainable and socially just forest governance.