Outcry over cheap rents for forests in Indonesia

Govt is offering mining companies land to collect rent for state coffers
Salim Osman, Straits Times 7 Mar 08;

JAKARTA - A NEW decree offering open-pit mining companies cheap rents for Indonesia's 'protected' forests has sparked an uproar and a growing environmental campaign against the practice.

Under the decree, signed by the President last month, companies can rent forest for an annual rate of just 3 million rupiah (S$460) per hectare, or 300 rupiah per square metre.

Mr Rully Syumada of Walhi, the Indonesian Forum for the Environment, has now organised a campaign to get the public to rent as much forest land as possible, before the mining companies can get their hands on it.

And he says: 'It's so cheap and far below the market value of the forest land. With 300 rupiah, you can buy pisang goreng (banana fritters).'

Environmentalists also fear the mines will be just the thin end of the wedge, with the decree also opening the land up to exploitation for oil and gas drilling, and the construction of electricity transmission towers and toll roads.

President Susilo Bambang Yudhoyono has defended the decree, signed on Feb 4, as a follow-up to decrees set by the Megawati administration allowing 13 mining firms to operate in protected forests.

He says it will encourage mining firms to immediately contribute to state coffers.

But critics point to the fact that, unlike the earlier decrees, it does not limit rights to certain companies, something confirmed by Energy Minister Purnomo Yusgiantoro last Friday when he said the scheme was open to any company which could pay the rent.

And the executive director of environmental group Greenomics Indonesia, Mr Elfian Effendi, says the mining sector would contribute only 0.17 per cent of the 1.5 trillion rupiah state budget for the year.

He says this is a far lower sum than what the environmentalists claim is the ecological cost of 70 trillion rupiah a year when protected forests are opened up to mining.

And he has accused the government of 'looking for so many ways to allow open pit mining in protected forests'.

So far, Mr Rully's move to block the mining companies has received support from Dr Din Syamsuddin, head of the second largest Muslim organisation Muhammadiyah and singer-cum-social activist Franky Sahilatua, who each donated 30 million rupiah to be used to rent 10ha of protected forest for two years.

Former environmental minister Nabiel Makarim, also donated 50,000 rupiah, saying that the decree 'will only allow businesses to destroy the forests'.

Meanwhile, the government has insisted on going ahead with enforcing the regulation, saying the fees collected could be used to 'regenerate' the country's ailing forests.

But Mr Rully told The Straits Times the decree was simply an 'about turn' by the government, coming hot on the heels of a strong commitment during the run-up to the Bali climate change meetings in December to preserve and restore Indonesia's forests.

'The President has not been consistent in his stand,' he said.

'He promised to protect the forest but now he has signed a decree that will destroy our forest and contribute to global warming.'

Indonesian mining rules alarm green groups
Reuters 7 Mar 08;

JAKARTA (Reuters) - An Indonesian conservation group said on Friday the government should be ashamed for approving a decree allowing mining companies operating in tropical forests to pay as little as $200 a hectare to rent more land.

Under a presidential decree issued on February 4, mining firms, including open-pit miners, will be able to pay between 1.8 million and 2.4 million rupiah ($200-$265) per hectare (2.5 acres) for forest land used for activities such as housing, roads, mine sites and waste dumps.

Indonesia had the fastest pace of deforestation in the world between 2000-2005, according to Greenpeace, with an area of forest equivalent to 300 soccer pitches destroyed every hour.

"Indonesia should be ashamed of itself," said Siti Maemunah of the Mining Advocacy Network, a conservation group.

She said the decree left open the prospect of more firms getting permits to operate in forests, adding that President Susilo Bambang Yudhoyono appeared not to recognize the huge environmental problems facing the country.

She called for the decree to be revoked and also noted it was issued weeks after Indonesia hosted a U.N. climate change conference in Bali at which curbing deforestation was a top issue.

Indonesian green group Walhi has also protested the move.

Since Monday, the Jakarta-based NGO has collected donations from almost 600 people to buy more than three million square meters of protected forest before mining companies get to it.

The money has been presented to the government and the campaign will open to international supporters next week, said Walhi forest campaigner Rully Syumada in Jakarta.

COMPENSATION FUND

Previously, firms had to provide new land to compensate for the use of forest areas, at twice the scale of the mining area for operations in Java and the same elsewhere in Indonesia.

But under the new decree, mining firms, during their contract period, pay into a compensation fund that would be used to replant forests, forestry ministry spokesman Ahmad Fauzi said.

"It's impossible to find new land to replant the forest that they have taken (for mining). We can't make rules which are not applicable. It may spark protest from the public," Fauzi said.

The decree applies to 13 mining firms that four years ago were allowed to resume operations in forest areas -- including Freeport McMoRan Copper & Gold which operates the massive Grasberg mine in Indonesia's remote Papua province that has been a frequent source of controversy over its environmental impact.

Indonesia's forestry law issued in 1999 prohibited open-pit mining in protected forest areas. But in 2004, Indonesia's fourth president, Megawati Sukarnoputri, issued a decree to allow the companies to resume operations in protected areas.

It was not clear whether the new decree will be extended to allow other mining companies to apply for permits to operate in protected forests.

The decree also applies to oil and gas companies, as well as companies involved in power transmission, hydro and geothermal power, and toll road operators.

"Permits will depend on the energy and mines ministry. But as long as they use our forest, they have to pay," Fauzi said.

The Indonesian Coal Mining Association said the latest decree could help spur flagging investment in the mining sector.

"It would not immediately spur new investment but it will increase appetite," association chairman Jeffrey Mulyono told reporters late Thursday.

Indonesia has some of the world's largest deposits of coal, copper, tin, nickel and gold, and is keen to earn more from the sector, particularly as strong demand from China and India has been driving prices up for many commodities to record levels.

(Reporting by Muhammad Al Azhari, Fitri Wulandari and Sally Pranowo; Editing by Ed Davies and David Fogarty)

($1 = 9,055 rupiah)

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