Indonesia`s planned moratorium on oil palm concessions lauded

Fardah Antara 21 Apr 16;

Jakarta (ANTARA News) - President Joko Widodos announcement last week about a plan to impose a moratorium on new permits for oil palm plantations has been lauded by some parties, particularly NGOs.

The moratorium policy is aimed at preserving Indonesias tropical rain forest, the worlds third largest after forests in Amazon and Congo.

The deforestation rate in the country, however, is very fast since land is being converted, particularly for plantation, and also due to forest fires.

"There will be a moratorium on oil palm and mining," the head of state, popularly known as Jokowi, stated at the launch of a National Movement for Plants and Wild Animals protection in conjunction with the World Forest Day, in Karya Island of Thousand Islands, Jakarta, on April 14.

The president said entrepreneurs and small business holders will not be allowed to expand land for oil palm concessions.

According to the President, the government is also planning to declare a moratorium on mining areas.

"Let there be no more clashes related to mining concessions with forest conservation. There should be no more of such things," said President Jokowi.

The existing oil palm plantations need to increase their productivity by using high quality seeds and maximizing the potential, he said.

Indonesia is the worlds largest crude palm oil producer with 31.5 million ton production in 2015. The sector provides jobs for six million people.

The countrys oil palm industry contributed at least US$19 billion in 2015, compared to oil and gas sectors US$12 billion contribution, according to Tofan Mahdi, spokesman of the Indonesian Palm Oil Association (GAPKI).

Smallholders account for about 40 percent of Indonesias 32 million palm oil output last year.

Rainforest Action Network (RAN) has welcomed the announcement of a moratorium on oil palm and mining permits by President Jokowi.

"The announcement of a moratorium on palm oil and mining permits by the Indonesian President Joko Widodo is a welcome development," Gemma Tillack of Rainforest Action Network wrote on the NGOs website, on April 18.

This announcement, in the run up to the signing of the Paris Agreement in New York City where delegates will discuss the urgency of taking action to mitigate climate change, is a sign that Indonesia recognizes the importance of keeping its remaining forests and peatlands intact, the NGO said.

"If enforced and extended to forests within existing palm oil concessions, this effort to halt the destruction of forests and peatlands, and to stop the forest fires set intentionally to aid the expansion of industrial palm oil development, will reduce Indonesias carbon footprint, the severity of the annual haze crisis and will also secure the lives and livelihoods of countless communities," Tillack remarked.

Besides, the Indonesian palm oil industry has the opportunity to secure its place as a major global supplier of palm oil by improving the practices of all actors in the palm oil sector and protecting its globally important ecological treasures, including the Leuser Ecosystem, according to RAN.

Leading environmental NGO Greenpeace has lauded the moratorium plan and hoped that the policy will be urgently implemented via a legally binding presidential regulation.

The move to end the expansion of palm oil plantations should protect all remaining forests, including those within concession areas, Greenpeaces Global Head of Indonesia Forest Campaign, Kiki Taufik, noted in a statement.

"The president said yesterday that the increase in productivity implied that no new land would be needed for palm oil plantations. He is absolutely correct. Instead of expanding into forests, palm oil companies and their customers must share their expertise and provide assistance to small farmers to increase their palm oil yield and ensure a sustainable livelihood for the Indonesian farming communities," Kiki explained.

Greenpeace Indonesia country director Longgena Ginting said Indonesias rapidly vanishing forests are in dire need of urgent protection, a fact that the President recognized with his very welcome moratorium announcement.

Improving transparency in forest data including mining, palm oil and pulpwood concessions, is a crucial prerequisite for implementing and monitoring the presidents plan, he said in a statement on April 15.

Greenpeace looks forward to the publication of this data which has been kept secret from the public for too long, he said.

"A ban on further mining and oil palm plantation concessions is a welcome pledge. However, Greenpeace calculates there are 10 million of hectares of forests currently facing clearance in existing oil palm, pulp and mining concessions. The president needs to urgently take measures to permanently protect forests and peatlands, wherever they are," he said.

From among the business circles, response came from the Indonesian Palm Oil Pledge (IPOP) Management and IPOP signatories which applauded President Jokowis moratorium plan.

"We hope this moratorium will be an initial step to synergies efforts to empower all stakeholders to achieve sustainable palm oil production in Indonesia. We should indeed be focused on intensifying our palm oil production and maintain competitiveness of this sector," Nurdiana Darus, Executive Director IPOP Management, stated in the press release dated April 15.

The Indonesia Palm Oil Pledge (IPOP) was signed at the UN Climate Summit by Wilmar, GAR, Cargill and Asian Agri. Musim Mas Mas also made its commitment to the Pledge in March 2015.

The moratorium is expected to come into effect this year.(*)

Mining moratorium contravenes govt’s own policies: Activists
Hans Nicholas Jong The Jakarta Post 21 Apr 16;

Environmental activists are skeptical about the government’s recent pledges to halt new mining permit issuances as its commitment might contradict with reality.

Mining Advocacy Network (Jatam) coordinator Hendrik Siregar said the planned moratorium contradicted the government’s ambitious plan to increase the nation’s electricity generating capacity until 2019.

“With the plan to produce 20 GW of electricity from coal, it will need at least 70 million tons of coal. This amount of coal will need lots of land and thus the moratorium will not be effective,” he said.

In mid-2015, President Joko “Jokowi” Widodo announced an ambitious capacity target to install 35 GW through 2019 as electricity demand is predicted to reach 7,000 MW per year. About 20 GW of the target will be met from coal-fired sources, with 13 GW from natural gas-fired plants and 3.7 GW from renewable sources (primarily hydroelectricity and geothermal resources).

“Jokowi’s program of increasing electricity means opening up land [for mining],” Hendrik said.

Despite the ambitious plan, Jokowi last week announced his plan to impose a moratorium on new mining permits as well as palm oil permits. He framed the licensing freeze as a continuation of the 2011 forestry moratorium, which banned new permits to develop on primary forests and peatlands.

“We will not allow the overlapping of mining concessions and forest conservation areas to happen again,” he said.

Indonesian Forum for the Environment (Walhi) energy campaigner Pius Ginting said the planned moratorium was not in line with the government’s policy to exploit coal as the country’s main source of energy.

“The government should have been consistent in its moratorium policy by canceling infrastructure plans that support the mining sector. Right now there are two such infrastructure plans: a double railway project for transporting coal in South Sumatra and a similar project in Central and East Kalimantan,” he said.

According to Pius, the development of the railways will increase the exploitation of coal in the two provinces.

“Forests in South Sumatra and East Kalimantan are still pristine and they will be threatened by mining expansion that will surely happen once the railway is operating there,” he said.

“Therefore, it’s not too late for the government to stop the development of the two railways because the one in South Sumatra is still in construction while the one in Kalimantan is still at an early planning stage.”

With contradicting policies, Hendrik urged the government to review its policies related to the mining sector that might hamper the moratorium’s planned implementation.

“The government should have reviewed the existing mining areas [WP] across the archipelago as the basis of the moratorium,” he said.

In 2014, the government determined seven WP corridors: Sumatra, Sulawesi, Kalimantan, Maluku, Papua, Java and Bali, and Nusa Tenggara. WPs comprise mining business areas (WUP), traditional mining zones (WPR) and state reserve areas (WPN).

Local administrations will be able to issue mining business permits (IUPs) according to locations that have been determined in WUPs.

“The government should have conducted a thorough study to change the WPs [to match the planned moratorium],” Hendrik said.

He added that Jokowi should make sure that the legal basis of the moratorium was stronger than other existing laws.

Review moratorium on oil palm plantations
Edi Suhardi Jakarta Post 21 Apr 16;

President Joko “Jokowi” Widodo plans to issue a decree on the suspension of issuances of new oil palm plantation development in the country. His decision is a commitment to protect the country’s remaining tropical forests and demonstrate his determination for the country’s environmental stewardship.

The President believes that palm oil production can be doubled on existing land through improved agronomy and plantation management.

Although the decision is well justifiable, the President fails to understand that his decision falls short in looking at broader and more comprehensive aspects.

The rate of palm oil expansion in Indonesia has fallen sharply from more than half a million hectares per annum in the period of 2007-2013. Currently, there are more than 11 million hectares of oil palm plantations. Under current trends it shows that palm oil plantations will only reach a maximum of 12 million hectares by 2020.

There are two key factors contributing to the organic decline of new palm oil plantation expansions. The first is its falling price. The most extensive new development took place in the period of 2007 to 2014 when the crude palm oil (CPO) prices ranged from US$600 to $1,200.

The second impediment is the Roundtable on Sustainable Palm Oil’s (RSPO) stringent standards for its members on developing new plantations. RSPO members from Indonesian palm oil growers control the largest concessions and operations on plantations.

The high pace of new plantation development has fallen sharply due to the introduction of strict and stringent RSPO standards preventing plantation development on high carbon stock (HCS) areas and high conservation-value (HCV) areas and implementation of free, prior and informed consent, which became effective as of 2014.

The sustainability standards, which RSPO members have fulfilled, have created an earnest impact to new plantation development in Indonesia toward an environmentally friendly and socially-sensitive commodity. All primary forest and peatland areas over HCS and HCV areas will be left intact.

But there are hundreds of palm oil companies who have yet to abide by such sustainability standards and still aim to develop on HCS or HCV areas.

This is where the government has to act to change the way these companies operate and to enforce such sustainability standards in operations, particularly in new expansions.

Introducing an indiscriminate moratorium will bring about unprecedented opportunity losses for economic development and the vanishing means for poverty alleviation, mainly for underdeveloped regions. Palm oil plantations are known to be one of the most effective development sectors, which can open up accessibility to the remote interior of the archipelago, providing employment and business opportunities and help close socio-economic gaps. At present, smallholder farmers control 4.6 million hectares or 42 percent out of 11 million palm oil plantations in Indonesia.

The moratorium will curtail smallholder development as it grows on par with the development of concession-managed plantations under the PLASMA scheme or company-smallholders partnership.

Another drawback of the planned moratorium policy is that the government seems to bow down to pressures on putting environmental considerations ahead of the development needs of people and regional areas. While globally, a sustainable development has been generally accepted as the common denominator to reconcile and align the interests of both environmental and development. The concept of sustainable development in palm oil has been well articulated in the RSPO-certified sustainable palm oil standard.

All growers and actors in the palm oil industry agree that intensifying the agronomy and use of high-yield seeds is the best way to increase productivity, rather than expansion.

Productivity improvement of palm oil is easier said than done, however, as it needs to replace existing palm trees through replanting and introduce modern agronomy in which smallholders would find difficult to adopt.

The President revisiting the plan on the moratorium would be a smart and wise decision. Rather than introducing the moratorium for new palm oil development permits, it is more reasonable and less controversial for the government to introduce a more stringent policy on the adoption of sustainability standards, acceptable to all stakeholders globally.

The policy should focus on strict criteria for new expansion or development of palm oil plantations. It should regulate the need for detailed assessment of land to identify the area for development and preservation areas, such as peatlands, primary forests and high biodiversity areas prior to land development. Also, the concessions must outline a management plan to ensure the long term existence of high carbon stock and high conservation areas.

Finally, the government needs to strengthen law enforcement to ensure the palm oil industry, especially oil palm plantation development, abides by the strict standards and criteria of sustainable palm oil.

The writer is the vice president of the Roundtable on Sustainable Palm Oil. The views expressed are his own.

Palm Oil Industry Fumes as Indonesia Gets Tough on Forest Fires
Bernadette Christina Munthe and Fergus Jensen Jakarta Globe 22 Apr 16;

Jakarta. Palm oil firms have slammed Indonesia's move to prohibit the use of new land to boost production, saying President Joko Widodo's latest effort to tackle forest fires could slash jobs and cripple output in the world's top producer of the commodity.

Palm oil is a major growth driver for Indonesia, but the industry is facing criticism for deforestation and its slash-and-burn forest-clearing techniques that send vast plumes of smoke across Southeast Asia every year, described by climate officials as a "crime against humanity".

Joko has pledged to tackle these fires and last week said palm oil firms must raise yields of existing plantations instead of clearing forests to increase acreage and output. The land already given to growers could be more than twice as productive "provided they use the right seeds", he said.

While green groups welcomed the moratorium, palm firms have questioned its effectiveness and cautioned it could hurt Indonesia's top-producer position.

"The president's suggestion of doubling Indonesian palm growers' productivity is easier said than done," said Togar Sitanggang, corporate affairs manager at Musim Mas, one of Indonesia's biggest palm oil producers.

"The problem with productivity has been there for years," he said, adding it was also unclear who would pay for the right seeds. "There is no budget for this."

Big players, such as Sinar Mas Agro Resources, Astra Agro Lestari, Wilmar International, may be able to raise output on their current holdings, but it will be tough for smallholders to do so, industry sources said.

That could lead to layoffs as the harder-hit smallholders, which account for 40 percent of Indonesia's output, are forced to sell land to bigger firms looking to expand, they said.

"Our reputation as the biggest palm oil producer will be history," said Eddy Martono, an official at the Indonesian Palm Oil Association.

The country churned out 32.5 million tonnes of the edible oil in 2015, two-thirds more than No.2 producer Malaysia. Indonesia's overseas palm oil sales raked in $19 billion over the period, or 13 percent of its overall exports.

Indonesia's palm oil industry and plantations are big enough already and "all that's left is how to increase production and (improve) efficiency in terms of land used for oil palm," presidential spokesman Johan Budi said.

A regulation on the moratorium is expected "this year, (but) when exactly I don't know", he told Reuters via a text message.

Still Hazy?

The moratorium is seen as a step in the right direction for Indonesia's reputation among consumers seeking sustainable farming practices. Palm oil is used extensively in food, cosmetics and biofuels.

Earlier this year, consumer goods giant Unilever dropped its deal with Malaysian palm firm IOI Group due to deforestation in the latter's plantations in Indonesia.

Joko, however, has stepped up the fight to strengthen environmental protection and has earned praise for steps taken after last year's forest fires, which were particularly bad due to a dryness linked to an El Nino weather event and which pushed the country's average daily greenhouse gas emissions above those of the United States.

Several palm oil companies have faced penalties for letting their concessions burn and the government has set up a new anti-fire agency to irrigate dry peatlands, where nearly half the blazes occurred last year. Joko also cut short a trip to the United States in 2015 to deal with the fires.

But huge challenges remain for Joko, including corruption in granting concessions and coordinating policy within a decentralised government.

Palm oil areas rose 9 percent from 2013 to around 11.44 million hectares (28 million acres) last year, despite an existing moratorium on clearing primary forest and peat-land.

"We have learned from weak enforcement of the moratorium on clearing primary forests and peatland that (such a ban) lacks teeth ... and must take the form of a binding presidential regulation," said Kiki Taufik of Greenpeace Indonesia.

Kiki said other government ministries need to be included in the drafting of the latest moratorium for it to be effective.

"We need to push the government to release a real regulation - not just a commitment."

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