Indonesia's plan to save its rainforests
Mongabay.com, 14 June 2010
By Rhett A. Butler
Photo by Marina&Enrique/Flickr
"Late last year Indonesia made global headlines with a bold pledge to reduce deforestation, which claimed nearly 28 million hectares (108,000 square miles) of forest between 1990 and 2005 and is the source of about 80 percent of the country's greenhouse gas emissions. President Susilo Bambang Yudhoyono said Indonesia would voluntarily cut emissions 26 percent — and up to 41 percent with sufficient international support — from a projected baseline by 2020.
Last month, Indonesia began to finally detail its plan, which includes a two-year moratorium on new forestry concession on rainforest lands and peat swamps and will be supported over the next five years by a one billion dollar contribution by Norway, under the Scandinavian nation's International Climate and Forests Initiative. But while money is starting to come into place for the scheme, daunting challenges remain in the battle to reduce deforestation. Powerful interests—especially in the forestry sector—have little desire to alter the status quo by bringing transparency to the system that enriched them. Meanwhile corruption remains pervasive, enforcement of existing environmental law is rare and inconsistently applied, and the system for establish and managing land tenure is a political and legal minefield in some parts of the archipelago. While optimists say the influx of carbon finance could create political will to change the system, pessimists argue the money could end up being wasted, even being used to finance conversion of natural forests for industrial-scale oil palm and timber plantations.
Nevertheless there is a lot at stake. Indonesia is the world's third largest greenhouse gas emitter, trailing only China and the United States, which unlike Indonesia are industrial superpowers. Indonesia's emissions are almost entirely from its agricultural and forestry sector, which generate a small proportion of the country's total economic activity (a 2007 estimated the benefit to Indonesia of the sector at $0.34 cents per ton of CO2, or a fraction of the value seen in Europe's carbon market). Furthermore, forests provide food, water, and livelihoods for tens of millions of Indonesians. Destruction of forests puts these resources and opportunities at risk, but payments for forest conservation could help ensure sustainable use and provide economic incentives for shifting plantation development to the millions of hectares of abandoned and degraded non-forest land that lie across the Indonesia archipelago.
The Plan for Norway's Money
Indonesia intends to use Norway's billion dollar commitment over the next five years in three phases. The first, which runs from now through the end of the year, will support "readiness" activities including the development of a national REDD (Reducing emissions from deforestation and forest degradation [including peatlands]) strategy; the selection of sites for pilot projects (candidates include forests in Papua, Sumatra, and Kalimantan); the establishment of a independent monitoring, reporting, and verification (MRV) agency for tracking progress on reducing deforestation; the establishment of a national REDD office that reports directly to the president; and determination of a long-term funding instrument for the program.
Phase two, which would run from January 2011 through the end of 2013, would operationalize the long-term funding mechanism; launch the first pilot project; enforce the two year moratorium on new concessions; establish a degraded lands database; launch of a second pilot project (by early 2012); and set up a more advanced MRV system. Phase three, which would begin in January 2014 and continue beyond, would help Indonesia expand its emission reductions programs and possibly integrate these into a future climate framework that may supplant the Kyoto Protocol when it expires in 2012.
But while there is an initial plan in place, some confusion remains. For example, shortly after Norway deal was unveiled and the moratorium announced, officials from various government ministries and industry bodies seemed to make conflicting statements in the press. Hatta Rajasa, the Chief Economic Minister, told Reuters that the government would not take away any forestry licenses a day after Agus Purnomo, head of the secretariat of Indonesia's National Climate Change Council, said that developers who lacked legal permits to clear forest land could lose their concessions. Purnomo said that some of Norway's money would be used to compensate palm oil developers and timber companies that could lose forest concessions under the emissions mitigation program. Meanwhile in the week after the agreement was signed, Wandojo Siswanto, the head of working group on the climate unit at the forestry ministry, said Indonesia would renegotiate the deal after it became apparent that Norway only agreed to support a "REDD" program, rather than a "REDD+" program which would include reforestation and "sustainable forest management", or reduced impact logging.
To clarify some of the details of Indonesia's new forest program and Norway's billion dollar commitment, Purnomo and his colleague Yani Saloh—both of whom were appointed as Special Assistant to the President of the Republic of Indonesia for Climate Change in early 2010—fielded some questions from mongabay.com. Purnomo and Saloh said that the partnership with Norway has changed the perception about forest conservation: "There will be revenues for various government agencies and local communities in keeping primary natural forests and peat lands."
Purnomo and Saloh note that "serious" forestry and plantation companies are supportive of the moratorium on new concessions for the conversion of peat lands and primary natural forests, and that all companies will be subject to rules issued prior to the moratorium, including the ban on conversion of peat lands greater than three meters (10 feet) deep. They also say that Norway's contribution̬at least in the later phase̬will be performance-based, meaning that if Indonesia fails to reduce deforestation it won't get paid.
Purnomo and Saloh conclude by arguing that consumers in Europe and the United States need to do more to support efforts to reduce deforestation, specifically paying a small premium for responsibly-sourced timber and palm oil.
"A boycott of all Indonesian forest products will further increase pressures on remaining forests because the loggers and local communities in the forests will have to cut more trees, and thus increase deforestation, to supply the cheap East Asia market for their subsistence."
AN INTERVIEW WITH AGUS PURNOMO AND YANI SALOH
mongabay.com: Now that Norway has put $1 billion on the table, are policymakers and other decision-makers seeing forest conservation as an opportunity rather than a "special interests" issue of environmentalists?
Agus Purnomo and Yani Saloh: The short answer is yes. The partnership with Norway has changed the perception, to a certain extent, about forest conservation. There will be revenues for various government agencies and local communities in keeping primary natural forests and peat lands. However, immediate payments are needed to keep the momentum of going to the sustainable direction.
mongabay.com: What is the plan for spending Norway's contribution? What about longer term (i.e. 2020)?
Agus Purnomo and Yani Saloh: The funds will be used to accelerate Indonesia’s growing investments in green development, and to provide capital for a range of initiatives, including micro-financing for community development projects, improved sustainability and yields of small plantations, and incentives for industrial palm oil growers to use degraded mineral soil areas for the development of new plantations.
The program will roll out a series of pilot projects over the next few years in a number of select provinces before scaling up to the national level. During the first stage, which will last through to the end of this year, a new agency will be established — one that will report directly to the president. This new agency will receive funding from REDD-Plus partnership nations in order to prioritize projects and align national, regional and local government efforts. To ensure that REDD-Plus programs benefit forest-dwelling communities, this new agency will include representatives from central and local governments, civil society organizations and local communities.
An independent MRV institution will be created to monitor, report and verify emissions and emissions reductions. Further efforts will include enhanced enforcement of forestry legislation, the creation of a degraded lands database and a better process to address land use planning, land tenure, conflicts over land title and compensation claims.
The Letter of Intent specifically enshrines the rights of local communities to participate in the governance of low-carbon development, and of the agency responsible for REDD+ programs and payments. They will have a role, as will civil society, in the governance of the new institutions set up to drive low carbon development. They will have input into the low-carbon development plans at provincial level, including the first pilots. Support from local communities is the heart of economic development, and we also recognize the unique role that local communities play in preventing deforestation and stewarding the environment.
mongabay.com: The moratorium seems to have caught some by surprise--is that why were are hearing mixed messages out of some of the ministries?
Agus Purnomo and Yani Saloh: There are no mixed messages. The moratorium is for new (repeat new) concessions on primary natural forests and peat lands, for two years. The highlight of the news that the government is 'trigger happy' in canceling existing concession is misleading. Those who are reacting to such news are misled or perhaps have interests in mind to utilize certain remaining peat lands or getting the timber out from primary natural forests on the pretext of developing palm oil or timber plantation.
The serious forestry and plantation companies are supportive to this moratorium policy, which has been in practice for the past eight months. There are of course, the rouge minority members of palm oil or timber plantation associations, just like any interest groups in society. We are hoping that the healthy open debate, through the media, will enable those elements to adjust to the grand strategy of sustainable forest management and sustainable plantations that the government is seriously implementing for the years to come.
mongabay.com: Do you have any clarification on the status of existing forestry concessions under the moratorium? Is there a possibility that permit holders would be offered the option of swapping holdings on natural forest lands?
Agus Purnomo and Yani Saloh: The moratorium on new concessions will be effective in 2011. During this phase, Indonesia will place a two-year moratorium on issuing new concessions for the conversion of peat lands and primary natural forests. Any business activities including plantations, mining or agriculture that secured permits before the year 2011 will be excluded from the moratorium. They can continue with their plans but still have to comply to the rules that have been issued prior to the moratorium such as the restriction of conversion for peat lands with more than 3 meters depth.
Forestry industries, forest management and agriculture activities can continue under their existing licenses. For their planned expansions, the government will provide information on available degraded forests as well as non-forest land where such development can take place.
International cooperation, such as the Indonesia-Norway partnership, can help improve the sustainability of our palm oil production by redirecting the expansion of the industry to fertile areas on already-deforested mineral soils.
There are detail implementation policies that the government will develop in consultation with the industries and civil society, to utilize degraded forest lands for the expansion of the forest and agriculture concessions, including the possibility of land swap on existing concessions.
mongabay.com: What about in cases where a developer does not hold a valid permit to develop peatlands or natural forest? Can these lands be seized?
Agus Purnomo and Yani Saloh: All players will have to follow the rules of the land. If they do not have a valid permit to develop peat lands or primary natural forests, then they won't be allowed to continue with their plans. According to the Ministry of Forestry, there have been no new permits issued to convert primary natural forests or peat lands since last year.
The government will take careful steps in solving conflicts of land use and land holdings. Upholding due process of laws will be of paramount importance in our efforts to reduce illegal conversions and occupations of forests and peat lands.
mongabay.com: Will Norwegian funds be used to promote development of abandoned agricultural lands and alang alang grasslands for plantations?
Agus Purnomo and Yani Saloh: Bilateral negotiation on details of what can be funded will start soon. From the government of Indonesia point of view, degraded lands, such as abandoned agricultural lands and alang-alang grasslands, are valuable economic resources that will be developed for the welfare of its people.
mongabay.com: Norway has indicated its funds will not support Indonesia's previously announced plan to reforest more than 20 million hectares of land. How much of this reforestation was to be plantations? Would any of the area be reforested using a diverse mix of native tree species?
Agus Purnomo and Yani Saloh: Norway money will fund a variety of projects at different levels, the many different kinds of projects needed to move our economy onto a low-carbon growth pathway. Some might be grassroots efforts for sustainable development, say through microfinance for local communities. Some money will go into traditional provincial-level development projects to help create a low-carbon infrastructure. Other funds could help smallholders improve productivity, or give incentives to palm oil companies to swap their forest concessions for a concession on degraded land.
Some of the money will be used in early stages to establish the necessary infrastructure of climate friendly development, improving our spatial planning systems, so that all parties have access to accurate data, developing our capacity and raising public awareness. It will also use to help create a system to verify and account for carbon emissions reductions.
In the first two phases of the Partnership, the focus will be on developing REDD+ at the level of one or two provinces. Local community organizations in the selected province/s will have access to the funds through the new REDD+ Agency. When we have full scale or nation-wide REDD+ implementation, local community organizations that are dependent to forest resources and peat lands can propose programs that will be funded through the Agency, from the Norwegian and other international sources of funding.
mongabay.com: Does the moratorium include a ban on new logging concessions?
Agus Purnomo and Yani Saloh: The moratorium will apply to new application of logging concession on primary natural forests or natural peat lands. The suspension of issuance of new concessions is a blanket one and it will be applied to all relevant parties. We are being transparent in announcing it ahead of time.
mongabay.com: Agus, given your work with Transparency International you are well aware of the pervasiveness of corruption in the forestry sector. Will any of the Norwegian money go towards improving transparency in land use policy?
Agus Purnomo: The Norwegian fund, at the later stage, will be a payment upon delivery of verified emission reductions. Some of the reductions will come from settlements of land use conflicts, including the development of database for degraded lands. Such implementation actions will be eligible for international funding, including the Norwegian fund.
Corruption is rampant in the last decades of Indonesian development, though the latest independent surveys on corruption in Indonesia have came with encouraging pictures of steady and significant improvements on good governance practices. The Human Rights Watch 2009 report acknowledged
- improvements in forestry management under the administration of President Susilo Bambang Yudhoyono, and significant successes in anti-corruption efforts have resulted in gains in Indonesia’s score on World Bank measures of control of corruption (Indonesia’s score nearly doubled from 2003 to 2007). The passing of a Freedom of Information Act and the establishment of an independent financial intelligence unit, the Center for Financial Transactions Reporting and Analysis (Pusat Pelaporan dan Analisa Transaksi Keuangan, or PPATK), along with recent anti-money laundering legislation and bank regulations for identifying high-risk customers and suspicious-transaction reporting are also positive development.
We welcomed the recommendations from the above report on strengthening anti-corruption efforts in the forestry and plantation sectors and have started a stronger coordination among law enforcement agencies to prevent the worsening of deforestation and forest degradation, as well reducing revenue losses from mismanagement and corrupted practices of the sectors.
mongabay.com: Apart from what has already been discussed, what are the biggest obstacles to reducing deforestation in Indonesia?
Agus Purnomo and Yani Saloh: The complexity in managing forest resources in Indonesia is high. We have a different set of challenges in managing our forests, in comparison to Brazil. Brazil’s biggest challenge on forestry issue is cattle ranching, while Indonesia’s challenges are illegal logging, oil palm expansion, forest fires, forest and peat lands conversion for economic development activities.
The oil palm and paper-pulp plantation industries are globally important industries, and extremely important for Indonesian livelihoods. Oil palm is important to world food supplies, as it is the most efficient of the edible oilseeds. It has the potential to be a useful biofuel. Palm oil growers are ahead of all the other edible oilseed growers in North America and Europe in setting standards for sustainability. But it is also true that the industry is contributing to today’s deforestation, an important source of carbon emissions, and which has many additional environmental costs to Indonesia.
In fact we believe we have enough land for the growth of this industry, suitable and fertile land that has already been cleared or has been degraded in other ways. The question is how to shift new plantations onto this degraded land, in an economically rational way. The two-year suspension comes in the second phase of our agreement, and it will allow us to work with the industry and focus our efforts on moving this industry onto a sustainable footing. Changes in regulatory regime may also be required to rationalize our spatial planning. Such efforts will increase the certainty for investors and help us secure long-term markets for our exports.
We can create improved livelihoods in Indonesia through sustainable agricultural expansion while reducing global greenhouse gas emissions.
Decentralization is another key issue, requiring coherence in planning at all levels. The Indonesia-Norway partnership will add more momentum to this alignment process. Local community participation in managing low-carbon development and the new REDD-Plus agency is enshrined in the cooperative framework. Empowerment and involvement of local communities is at the heart of economic development and we recognized the role that local communities can play in preventing deforestation and stewarding the environment.
mongabay.com: Last week Obama canceled his June trip to Indonesia. Despite this set back, what role can the U.S. play in helping Indonesia protect its forests?
Agus Purnomo and Yani Saloh: There are a number of ways that the US can help Indonesia in furthering the forest and climate initiative, such as: creating a regional facility on climate change that can provide scientific, technical and management system supports for various climate mitigation and adaptation efforts. The on-going discussion between the US and Indonesia on establishing a Regional Climate Change Center would be a concrete support to strengthen the Indonesian plan to implement REDD+ and to deliver emission reductions of 26% from the projected emissions in 2020.
The US can also provide data and technical support through their remote sensing and mapping agencies, such as NASA and USGS, to the – about to be created – independent MRV Agency. Such provision of data can increase the accuracy and credibility of the Indonesian MRV Agency, which in turn will improve in the implementation of REDD+ and other mitigation actions.
The dissemination of information from the REDD+ Agency (also to be created) and feedback from the MRV Agency to the communities and local governments with forests and peat lands is another possible support from the US. Through real and effective actions on the ground we can prevent deforestation, forest degradation, fires, illegal logging and conversions.
mongabay.com: Do consumers in Europe and the U.S. have a role to play in ensuring raw materials are sourced sustainably in countries like Indonesia?
Agus Purnomo and Yani Saloh: A lot of deforestation and forest degradation are market-driven, and the consumers in Europe and the US are part of the problem. Especially European and US consumers are encouraging deforestation with their reluctance to pay a small additional price for sustainably sourced forest products. Certified timber products have minimum incentive to improve sustainable forest management because of the lack of premium price.
A boycott of all Indonesian forest products will further increase pressures on the remaining forests because loggers and local communities in the forests will have to cut more trees, and thus increase deforestation, to supply the cheap East Asia market for their subsistence."
Source, with maps: http://news.mongabay.com/2010/0615-hance_tongass.html