More forests to be sacrificed for pulp

The forestry department's decision to extend the deadline from 2009 to 2014 was made public in January. Under the new arrangement, companies may continue to use wood logged from natural forests to make up the deficit in supply from pulpwood plantations. Forestry Minister MS Kaban said the pulp industry had been disrupted over the last two years and needed more time for rehabilitation.¹

A previous regulation (No.101/MenhutII/2004) required companies holding wood plantation licences (HTI) to have completed a plantation acceleration programme by 2009, meaning that no more natural forests could be converted after that.²

The news that this deadline would be shifted forward five years was met by a volley of criticism from Indonesian civil society organisations who say the move will worsen the country's deforestation crisis. Extending the deadline in this way, said Wirendro Sumargo, director of Forest Watch Indonesia, amounted to "speeding up forest destruction" and "proved the failure of government efforts to boost the development of pulpwood plantations (HTI)"³. "Perhaps the minister has forgotten", suggested Friends of the Earth Indonesia's Berry Norqan, "that 72 percent of Indonesia's natural forests have already been wiped out."⁴

FWI had earlier urged the government to stop the further use of wood from natural forests, based on a study of two giant pulp and paper companies operating in Riau province, Riau Andalan Pulp & Paper (RAPP, of the APRIL group) and Indah Kiat Pulp & Paper (IKPP, of the APP/Sinar Mas conglomerate).⁵ The NGO had called on the companies to rationalise their production in line with what their pulpwood plantations could actually produce. RAPP and IKPP account for 62% of Indonesia's installed pulp production capacity.

Based on how much plantation wood had been planted by the RAPP, IKPP and their partners, FWI had calculated that the companies would be reliant on feedstock from natural forests until 2014 (now the new official deadline), and estimated that 0.57 million hectares of natural forests would be under threat as a result.

RAPP and IKPP each have an annual pulp production capacity of 2 million tonnes and each requires at least 9.5 million tonnes of wood per year. Both companies have long, troubled histories which included instances of human rights abuses as well as land disputes and illegal logging (see box).

APP and RAPP involved in attacks against villagers In December last year, the German NGO Rettet den Regewald reported that the village of Suluk Bongkal in Riau was attacked by the police and by over 500 paramilitaries, armed with fire-arms and tear gas. A helicopter dropped incendiary devices and hundreds of houses immediately went up in flames. Two small children were killed and 400 villagers fled into the forest. A helicopter was then reported to have dropped stones on tents set up by refugees from the village. The violence was linked to Sinar Mas/Asia Pulp and Paper (APP), which reportedly owns the helicopter used in the attacks. (See sign up petition at www.regenwald.org/international/englisch/protestaktion.php?id=345) A separate incident in February involving Sinar Mas prompted an international campaign to release detained villagers Jambi. They were arrested for reclaiming land which had been illegally taken over by the company for oil palm plantations.(See press release) In 2006, NGOs protested against violence by RAPP security guards against villagers and their property in Gading village, Kampar district - see www.cappa.or.id/index.php?option=com_content&task=view&id=39&Itemid=1 and DTE 69 for further background.

Unsustainable development

The government allocated 10.26 millions ha of state production forests to industrial timber plantations (hutan tanaman industri, or HTI), but less than a third of this had been planted by early 2007.⁶ In a pattern still repeated today, woodchip and pulp and paper mills have been constructed before plantations, if planted at all, are mature enough to supply wood for the mills. Until then, companies run their operations with wood from natural forests called 'mixed tropical hardwood' (MTH) by the industry. This wood comes from within their HTI concessions (although these are supposed to be in degraded forest areas), or bought in from external legal or illegal sources.

As Indonesia's Climate and Forest Alliance (an international study group led by Indonesia's own forestry department) puts it: "Weak enforcement allowed some pulp mills to expand their processing capacity without creating an adequate plantation base. This had led to the unsustainable consumption of available supplies of mixed tropical hardwood within a commercial distance of mills."⁷

According to Christopher Barr, a researcher at the Center for International Forestry Research (CIFOR), by the end of 2007 of the 10.4 million hectares of HTI licences issued or pending, 6.0 million hectares were allocated for pulp projects, including:

• Papua - 1.6 million ha
• South Sumatra - 1.0 million ha
• East Kalimantan - 793,000 ha
• Riau 653,000 ha
• West Kalimantan 485,000 ha.⁸

Barr's research found that over 210 million m3 of MTH from natural forest has been used by the pulp producers since 1990, mostly from land-clearing for acacia or oil palm plantations. Since the late 1980s, Indonesia's pulp industry has been responsible for clearing at least 1.7 million hectares of natural forest. Riau has suffered the most destruction - it has lost at least 65% of its forest cover in the last 25 years.⁹

HTI certification opposed Even where companies like RAPP and IKPP have established plantations, these are mostly done by replacing natural forests and at the expense of the people who held customary rights over those forests. Indigenous communities whose rights are not given recognition under Indonesian law, are pushed aside without exercising their right to free, prior and informed consent. In February this year Indonesia's ecolabelling institute (LEI) issued Sustainable Plantation Forest Management certificates to two pulp companies operating in Sumatra: PT RAPP in Riau and PT WKS in Jambi. But FWI has called on LEI to stop issuing such certificates because they don't take into account the destruction of natural forests before the plantations were established. "Converting natural forests, let alone those in peatland areas, into pulpwood plantations is in clear opposition to sustainable forest management principles" said Wirendro of FWI.10 See also DTE 69, for further background on LEI certification of RAPP plantations in Riau.

Expansion plans

Expansion plans are centred on Riau, Jambi, East, West, South and Central Kalimantan and also Papua, where several projects are being constructed, planned or at least explored in Merauke district by Indonesia's Medco, Modern Group, and US company, International Paper.¹²

Though dominated by Indonesia-based business conglomerates, the country's pulp and paper industry has been developed with the assistance of overseas consultants, bankrolled by overseas investors, supplied with equipment from overseas companies and often backed up by publicly-funded government export guarantee agencies, including from Japan, the US and several from Europe.¹³

Overseas funding looks set to continue, despite the global economic credit crisis: in March, the website of the coordinating ministry for economic affairs reported that 24 Indonesian and foreign companies would invest Rp35.6 trillion (US$3 billion) this year to develop 1.3 million hectares of industrial timber estates (HTI). PT Taiyoung Engreen and PT Inni Joa, both from South Korea, plus Indonesia's PT Selaras Inti Semesta had already secured the licences for respective projects in Central Kalimantan (59,981 ha), South Kalimantan (28,721) and Papua (259,475 ha). A further 21 companies had been given approval in principle.¹⁴

Korean wood biomass project As well as providing pulp for consumers abroad, Indonesia's forests are being cleared to serve the global demand for energy. Forests are being replaced by agrofuel crops such as palm oil and jatophra, and now, timber plantations for biomass energy. South Korea and Indonesia have signed an agreement to use forests in Indonesia to produce wood for biomass energy generation. The MoU was signed by Korea's forestry service and Indonesia's forestry ministry in March during Korean president Lee Myung-bak's visit to Indonesia. According to Korea's forestry service, the agreement includes developing plantations and wood biomass projects under the Kyoto Protocol's Clean Development Mechanism (CDM).15 One media report stated that 200,000 hectares of forests in Kalimantan would be set aside to produce wood pellets for fuel.16 However, the agreement details indicate that this project is more likely to be in Papua: The Korean parties are named in the Jakarta Post as Korea Midland Power, Orient F.A. Machinery, and Samsung C&T Corporation, while the Indonesian party is PT Medco Papua Industri Lestari. The project is named as 'Merauke eco-friendly biomass power project'.17 Indonesia's Medco conglomerate has been involved in promoting a food mega-project in Papua, as well as pulpwood plantations (see DTE 78). The newspaper reported that this was one of 8 deals worth almost $6 billion. Last year South Korea was Indonesia's 6th biggest investor with 182 projects valued at US$301.1 million.18 The scheme is part of South Korea's 50t won (US$40bn) 'green' economic strategy, which includes spending $1.7bn on forestry management, including tree planting and new facilities to use wood as biomass energy.19 It is likely that such agreements will mean further pressure on forests and forest-dwellers. As in the case of agrofuel, covering more land in plantations and bulldozing the complex forest landscapes managed by indigenous communities, is anything but green.

Peat and carbon emissions

Christopher Barr estimates that above ground CO₂ losses from the use of MTH and plantations establishment amounted to 424-799 million tonnes during 1990-2006. Drainage of peatlands for pulp plantations is estimated to produce an additional 108 million tonnes per year. According to his research, 1.2 million hectares of active HTI concessions are on peatland.²⁰

Expansion of oil palm plantations, in addition to pulpwood is putting increasing pressure on Indonesia's carbon-rich peatland areas. Around a half of Indonesia's 22 million hectares of peatland has already been drained for logging, a third has been cleared for agriculture and almost a third of the remaining peatland is classified as conversion forests. Permits have already been issued to convert around 4 million hectares for pulpwood and oil palm. If these forests are cleared and drained annual CO₂ emissions will increase by another billion tonnes.²¹

According to Greenpeace, total greenhouse gas emissions from Indonesia's peatlands are around 1.8 billion tonnes per year or 4% of global emissions.²²

In its report on reducing emissions from deforestation and forest degradation in Indonesia (REDDI) prepared in 2007, the IFCA recommends shifting pulpwood plantations away from peatlands, and requiring pulp and plantation companies to report on activities that affect their carbon footprint, such as wood utilisation, activities affecting peatlands, energy consumption and emissions. It suggests that the government could require companies to present a 'sustainability action plan' covering social and environmental issues.

The IFCA also recommends strengthening the government's commitment to phasing out MTH for pulp by 2009, by introducing "binding regulations" to prevent pulp mills having access to MTH after this year.²³ In what apparently indicates a preference for sustaining industry rather than the forests, the government has instead opted to let them carry on plundering the natural forests until at least 2014.

New report: Plantations Poverty and Power This report by campaigner Chris Lang on Europe's role in the expansion of the pulp industry in the South, is available from chrislang.org/2009/02/06/plantations-poverty-and-power/ The report includes a detailed case history of APP in Indonesia's Riau province - a story of bad debt, illegal logging, the destruction of community livelihoods, and of biodiversity and the environment, including carbon-rich peatlands.

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