Patrick Barta The Asian Wall Street Journal 12 Jul 10;
JAKARTA, Indonesia—A widely hailed new project to restrict forest-clearing in Indonesia over the next two years is turning out to be more complicated than expected and could leave large areas of the country unprotected, as environmentalists and industry groups fight over terms of the deal before it takes effect in January.
Announced by President Susilo Bambang Yudhoyono at a conference in Oslo in late May, the plan was part of an international agreement aimed at reducing Indonesia's greenhouse gases by curbing deforestation. Indonesia is among the world's biggest sources of greenhouse gases, largely because of rampant burning of peat and forest land for palm oil plantations and other industries.
Norway pledged to invest up to $1 billion in Indonesian conservation projects and local authorities agreed to boost forest-monitoring efforts and other steps in addition to the two-year moratorium. Advocacy group WWF called the partnership "a huge step" toward saving Indonesia's forests, and Greenpeace hailed it as "a great start" toward reducing greenhouse-gas emissions.
But the letter of intent underpinning the plan was vague about which forests would be covered, environmentalists and industry officials now say. It indicated the moratorium would cover "all new concessions" for clearing of peat and natural forest but didn't specify what constituted "natural" forests or whether unused permits in virgin areas would be honored.
Government officials have since said that some areas, including lands around important infrastructure and renewable energy projects, won't be covered. Other forested areas may not be included because of power-sharing rules between the central government and local provincial officials, environmentalists say.
Meanwhile, industry leaders are gearing up to make sure they retain the right to clear areas they were already planning to develop. Environmentalists say more loopholes could emerge.
"We could still see quite a lot of deforestation happening over the next two years" despite the moratorium, says Moray McLeish, a project manager for the Washington-based World Resources Institute, an environmental think tank. "This I think is against the spirit of the deal."
Government officials acknowledge the program may not cover as much land as environmentalists had hoped and that many elements remain uncertain. But they argue—with some agreement from environmentalists—that the program still represents major progress in a country famous for out-of-control logging.
Government leaders also long ago admitted they weren't able to fully police land-clearing in more remote areas.
"We'll get through this and the confusion will be settled" before January, says Agus Purnomo, head of secretariat for the National Council on Climate Change in Indonesia and one of President Yudhoyono's top officials on climate-change policy. He predicts the plan will ultimately protect about 123 million acres. Indonesia lost roughly 1.2 million acres of forest per year from 2000 to 2010, according to the Food and Agriculture Organization of the United Nations. About 49% of Indonesia's roughly 320 million acres of forest land is still pristine, the Forestry Ministry says.
Mr. Purnomo says many of the complaints over the deal "are created by elements of industry that would like to curtail this effort," while environmentalists are pressing for "radical" interpretations that could block acceptable development. "We will settle somewhere in the middle," he says.
Forested areas are critical to Southeast Asia's largest economy and a major source of revenue for many of its biggest companies, including Asia Pulp & Paper Co. and PT Sinar Mas Agro Resources & Technology, which produces palm oil.
Palm oil industry officials in particular have ambitious plans to expand so they can keep up with rising demand for a commodity that is used to make products as varied as shampoo, cookies and alternative fuel.
"We fear that the government regulation practically will stop all the possible expansion of oil palm," says M. Fadhil Hasan, executive director of the Indonesian Palm Oil Association. "We have to fight to make sure this moratorium resolves into something in accordance with our interests."
Concerns about deforestation deepened on Tuesday, when Greenpeace issued a new report alleging that Asia Pulp & Paper is acquiring and destroying rainforest and peat land areas to feed pulp mills in Sumatra, despite promises to adopt more sustainable business practices, and despite the planned moratorium. Greenpeace called on international supermarket retailers to stop dealing in the company's products.
Aida Greenbury, managing director for sustainability and stakeholder engagement at Asia Pulp & Paper, said the reports were "totally baseless" and "totally illogical." She said the company gets 85% of its pulpwood from sustainable plantations, compared with about 50% in 2006, and intends to increase that percentage in the future.
One of the biggest questions is whether the moratorium will prevent the use of land-clearing permits that haven't yet been acted on. Indonesian companies have built up giant banks of undeveloped land in recent years; according to Greenpeace, there are least 44.5 million acres of forest on the island of Sumatra alone that can be developed under prior pulp and paper concessions if they aren't affected by the moratorium.
The language of the agreement focuses on "new concessions," and suggests such lands won't be covered. But environmentalists say failing to include them would undermine the benefits of the moratorium.
Mr. Purnomo, the Indonesian climate-change official, says the government intends to honor existing permits but may offer compensation in some cases if companies willingly agree to leave already-permitted areas untouched.
The long-term solution, environmental groups and government officials say, is for palm oil and other companies to meet their growth targets by boosting productivity on existing plots and expanding onto "degraded" land, including areas that have already suffered some deforestation, rather than clearing new stretches of forest.
But officials haven't yet fully defined such areas, which are estimated to cover anywhere from 15 million acres to more than 99 million acres. An accounting of the lands is slated to occur as part of the Norway pact, but industry leaders say they can't be expected to assess the suitability of such land until it is properly identified.
—Yayu Yuniar contributed to this article.