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International calls for sustainable development advocate that forest management should be carried out in a multi-stakeholder environment. The importance of community participation is acknowledged in the Indonesian act no. 41 on Forestry (1999). However, it is not clear how to achieve this in areas already allocated to a concession holder. Current regulations offer little flexibility for concessionaires to develop site-specific management, or to involve local communities in forest management. The research reported here examines he application of simulation techniques to explore scenarios of sustainable forest management addressing those limitations. Several scenarios have been developed using multi-agent simulation to examine social and biophysical issues. Of the four scenarios examined in this study, collaborative forest management involving both the concessionaire and the local community appears to offer the most promising pathway toward sustainability.