Indonesia Says Won't Revoke Existing Forestry Licenses

Niluksi Koswanage PlanetArk 3 Jun 10;
(Editing by Michael Urquhart)

Indonesia won't revoke existing forestry licenses for palm oil firms as part of a deal with Norway to preserve rain forests, a government minister and industry official said on Wednesday.

Chief Economic Minister Hatta Rajasa told reporters that the government had no intention of limiting the expansion of the $15-billion Indonesian palm oil industry, although it was committed to slowing deforestation.

"We want to keep to our targets of 40 million tonnes of crude palm oil," he said on the sidelines of an industry conference in Java. "We will not take away the existing licenses."

The country plans to produce 21-23 million tonnes of palm oil this year.

"We have food security interests and our export earnings to protect but expansion will be at a sustainable pace for our future generations," Rajasa added.

A two-year commitment to halt new concessions to the industry for the conversion of rainforests and peatlands will go on as planned under the Norwegian deal signed last week, Indonesian Palm Oil Board Vice Chairman Derom Bangun said.

"The government has assured us that the expansion of oil palm estates will continue within reasonable limits," Bangun told Reuters.

A government official had previously said Indonesia could revoke licenses, and would provide compensation and degraded land in exchange, prompting planters to say that such a move would put their investments in jeopardy.

Leaving existing licenses untouched would allow top planters like Singapore-listed Wilmar and Malaysia's Sime Darby to continue developing concessions and keep up with global demand for the vegetable oil used in chocolates, cooking oil and biofuels.

FOOD, REVENUES AND ENVIRONMENT

Indonesia has vast tracts of rainforests and peatlands that have been rapidly converted into oil palm estates, pushing the Southeast Asian country ahead of Malaysia as the world's top palm oil producer.

Green groups and governments contend that climate change can be slowed if Indonesia's forests, which soak up global warming gases like carbon dioxide, are preserved.

Indonesia has pledged to cut emissions by 41 percent by 2020 if it gets foreign funding and other assistance or by 26 percent if it does not.

Norway's $1-billion contribution to forest conservation projects in Indonesia is contingent on the Southeast Asian country proving that it can curb the rate of deforestation and therefore reduce the amount of greenhouse gas emissions.

Most of the funds will be spent on preparing for and implementing pilot projects under a U.N.-backed forest preservation scheme called reducing emissions from deforestation and degradation (REDD).

REDD allows developing nations to earn money by not chopping down their forests or through replanting cleared or degraded forests.

On Tuesday, an Indonesian government official said the palm oil industry could still grow via acquisitions of six million hectares of degraded land across the archipelago.

Indonesia`s emission cutting program not to affect timber estates
Andi Abdussalam Antara 5 Jun 10;
Jakarta (ANTARA News) - Forest concession holders (HPH) and timber estate businesses (HTI) should not worry about the government`s commitment to halt deforestation and reduce emissions made in a Letter of Intent (LoI) signed with Norway recently.

Based on the agreement, the governments of the two countries agreed that Indonesia would stop deforestation through the imposition of a moratorium on the conversion of peat land and natural forests.

According to Forestry Minister Zulkifli Hasan, the agreement between Indonesia and Norway on emission reduction would not affect industrial timber estate (HTI) and forest concession (HPH) development programs.

"The LoI only calls for a moratorium on forest conversion for plantations or non-forestry activities on peat land throughout Indonesia. HTI and HPH programs can continue," the minister said on the sidelines of the popularization of LoI to forestry businesses here on Friday.

What the ministry of forestry would be doing was to put in order forest concessions already covered by permits. So, the forestry development programs already approved by the government would go on.

The forestry development programs are among others the annual Societal Forest Development (KHm) and Village Forest Development covering 500,000 hectares, Forest and Land Rehabilitation (RHL) in river basin areas (DAS) covering 300,000 hectares, HTI and Small-holders Timber Estate (HTR) covering 540,000 hectares, HPH Restoration (300,000 hectares) and Partnership Forest Development program.

He said that the development of HTI and HPH would not be affected by activities the forestry ministry would carry out based on the LoI.

The minister said that the government had set its forestry development priorities as stipulated in its Medium-Term Development program (RPJM). The RPJM would serve as the basis for the actions to be taken to follow up the LoI.

"Our efforts to manage our forests are linked to climate change, among others with regard to the Reducing Emission from Deforestation and Forest Degradation - Plus (REDD-Plus) scheme. So, I will stress here once again that the LoI will not pressure us because it is in line with the RPJM plan," the minister added.

It was mentioned in the LoI that the moratorium would start in January 2011 and last two years on all peat land and natural forest conversions. "During the period there will be no licenses for conversions or any licenses for opening of peat land and natural forests," Zulkfli Hasan said.

The governments of Indonesia and Norway signed in Oslo last month a Letter of Intent (LoI) on forest conservation worth US$1 billion as part of their joint commitment to overcoming climate change.

The letter was signed by Foreign Affairs Minister Marty Natalegawa and Norwegian Minister of Environmental and International Development Erik Solheim at the guest house of Norwegian Prime Minister Jens Stoltenberg. The LoI is part of the REDD-Plus scheme in which Norway will provide up to US$1 billion in grants to Indonesia to protect its forests.

Based on the LoI, the Norwegian government will provide the US$1 billion if the Indonesian government is able to fulfill the three stage requirement as contained in the LoI.

The first stage is capacity building which among others is carried out through the formation of a body with the authority to implement the program. The second stage is the implementation of a pilot project. The two governments will agree on a certain location for the pioneer project in Indonesia.

The third stage is the implementation of the scheme comprehensively on the national scale. During this stage payments will be made based on the performance. The funds will be provided if Indonesia is able to prove its success in preventing deforestation and forest degradation.

With the agreement, Indonesia now has a chance to gain US$123.75 million from its efforts to preserve its forests and reduce gas emission from deforestation next year, a senior official said.

Director General for Forest Production Development Hadi Daryanto said here on Friday the funds constituted payment for Indonesia`s efforts to reduce its gas emission (C02e) by 123.75 million tons.

He said the US$123.75 million could be claimed from Norway based on the Letter of Intent (LoI) signed by the two countries recently.

"We have calculated that we will be able to reduce our gas emission by 123.75 million tons next year. If the price of CO2e is US$1 per ton, we can claim US$123.75 million. If in 2013, the price of the gas emission increases, we will get more," he said.

He said that of the country`s 130 million hectares of forest, about 1,175 millions hectares were deforested every year. Thus, the country`s average deforestation pace is 1.175 million hectares per annum.

According to the forestry official, Indonesia next year is expected to reduce the pace of its deforestation by 225,000 hectares to about 950,000 hectares only.

The volume of biomass carbon of non-peat land forest is about 550 tons per hectare. So, with its success to stop the pace of its deforestation (by 225,000 ha x 550 tons CO2e), Indonesia will get a payment of US$123.75 million.(*)

Moratorium not to affect licensed forestry firms
The Jakarta Post 6 Jun 10;

The director general of forestry production at the Forestry Ministry said on Sunday that companies with licenses can do their logging works as usual despite the two-year moratorium on forest and peatland clearance.

Director General Hadi Daryanto told Tempointeraktif.com that the moratorium means that the government would not issue new licenses on forest and peatland clearance for the next two years.

Hadi explained that forestry companies that are already in operational should be allowed to continue with their works because it affects their investment and employment.

"There is an element of investment and employment there. If everything is under moratorium, how about the fate of the labors," Hadi said.

Norway recently agreed to provide US$1 billion grant to Indonesia to protect its forests. One day before the deal, President Susilo Bambang Yudhoyono announced that the government would impose a two-year moratorium on forest and peatland clearance.