Forests fight back as Indonesia tackles illegal palm oil

Gillian Murdoch, Reuters 22 Sep 09;

ACEH, Indonesia (Reuters) - For decades, the roar of the chainsaw has meant one thing in Indonesia's national parks: illegal loggers ripping down the rainforest.

Now, the whirring blades are part of a fight back to cut out illegal palm oil from the international supply chain and slow the deforestation that has pushed Indonesia's carbon emissions sky high, threatening the destruction of some of the world's most ecologically important tropical forests and their animals.

In the country's first, symbolic action to stop the lucrative crop's march into protected lands a chainsaw-wielding alliance led by the Aceh Conservation Agency (BPKEL), Acehnese NGOs, and police teams are sweeping tens of thousands of hectares of illegal palm from the 2.5 million hectare Leuser Ecosystem.

"Plantation speculators, developers, whatever you want to call them, have moved in further and further," said Mike Griffiths of BPKEL, the agency created by Aceh Governor Yusuf Irwandi to manage Leuser in 2006, a year after the province at Sumatra's northern tip won greater autonomy from Jakarta.

"They do it by fait accompli... Go in, knock the trees down and plant, and all of a sudden the local perception is that you own it. It's Wild West stuff."

Planting a cash crop used in some of the world's best-known brands of chocolate, crisps and soaps inside legally-protected forests and national parks may seem a high-risk strategy.

But with much legal land already allocated, lax law enforcement, large untapped workforces of villagers living inside remote rainforests, and high Crude Palm Oil (CPO) prices, such illegal conversions makes sense to many.

"The forest is seen as a green tangle with little real use and filled with dangerous animals and diseases," explained Jutta Poetz, Biodiversity Coordinator at industry environmental standards body the Roundtable on Sustainable Palm Oil (RSPO).

"If this green tangle can be converted into something profitable, with the dangers largely removed, isn't that good? Plantations will develop the country, create jobs and improve people's lives. This appears to be the prevailing sentiment in Southeast Asia."

GREASY PALMS?

One year after Indonesia overtook Malaysia as the world's top palm oil producer, hundreds of illegal plantations are thought to riddle its reserves.

A 2007 United Nations report found forest conversion for palm oil plantations was the country's leading cause of deforestation, with illegal oil palm, illegal logging and illegal land clearances by fire occurring inside 37 of 41 national parks.

Leuser, Sumatra's largest rainforest expanse, and one of the last refuges for endangered Sumatran tigers, elephants, orangutan and rhinos, was one of the worst affected, it said.

Industry bodies, such as the Indonesian Palm Oil Association, GAPKI, insist all plantations follow government regulations, and any found playing fast and loose with the rules are targets.

"We support that illegal oil palm plantations have been cleared -- if they do not follow all the regulations," said Fadhil Hasan, Executive Director of GAPKI.

The Leuser chainsaw sting evicted eleven illegal estates covering 12,000 hectares, a fraction of the at least 50 other illegal estates BPKEL estimates are in the reserve.

NGOs in Aceh say corruption greases the wheels of the plantation concession system. Officials allegedly pocket millions of rupiah for issuing non-binding "recommendations" to companies lacking official permits, and fail to enforce laws stipulating ten years' jail and a $500,000 fine for planting in parks.

Forestry officials in the area say confusion, rather than corruption, is the problem.

Conflicting maps, clashing tenure claims, and overlapping authorities mean locals, district chiefs, companies and government officials may not be aware of exact park boundaries, even in UNESCO-listed World Heritage rainforests such as Leuser.

"The boundaries do not match reality in the field," said Syahyahri, head of Aceh Tamiang Forestry Department.

"Villagers don't know who the forest belongs to. They may not have seen the maps. We are gathering data for making the boundaries now."

HIDDEN COSTS

Leuser's regenerating forests will form a 'corridor' connecting two otherwise non-viable elephant herds, which became separated by the sea of illegal palm over the last decade said Rudi H. Putra, BPKEL conservation manager.

But keeping the high-yielding crop out will take vigilance.

"The problem is protecting the forest," he said. "Growing oil palm is easy."

As well as planting in parks, Indonesia's oil palm industry has been accused of converting forests on carbon-rich peatlands more than two-meters deep, and setting fires to clear land.

GAPKI denies knowledge of these illegal activities, which not only harm the industry's reputation, but also release billions of tonnes of carbon into the atmosphere.

While the companies caught in Leuser were domestic, rather than international players, confusion and illegality seeps upwards into the global supply chain.

Blended together at mills and shipped overseas, legal and illegal oils flow into a myriad of products such as chocolate, shampoos, soaps and biofuels, leaving multinational end-users, and consumers, exposed to the risk of illegal ingredients.

While the high price of segregating oils means even RSPO-certified products cannot guarantee illegal oils are excluded, concerns over governance problems, and the crops environmental and social impacts, are already hitting profits.

In late August the World Bank's private finance arm, the International Finance Corp (IFC), which has $132 million invested in palm oil projects, suspended all palm-related investments, due to complaints about plantations' dubious licensing, land-rights conflicts and illegal logging activities.

The same month Cadbury New Zealand pulled palm oil from its milk chocolate products, after consumer protests over the crop's role in rainforest destruction in Indonesia and Malaysia.

Back in Aceh, BPKEL and police teams hope their lead can be followed in other areas.

Felling illegal palm will both save forests, and safeguard the industry's long-term financial security by weeding out cowboys, said Hariyanta, police chief of Aceh Tamiang district.

"The local people only get a day's food from a day's work on the illegal plantations, but the companies get so much money," said Hariyanta, who like many Indonesians, goes by one name.

"That's why we go after the companies."

(Additional reporting by Aloysius Bhui in Jakarta, Editing by Megan Goldin)