How are climate change developments being played out in Indonesia?

Down to Earth No.76-77, May 2008

Indonesia's government, as host to COP13, has been keen to portray itself as a committed guardian of the carbon stocks in the country's peatlands and forests, while conveying the message that it should be compensated for funds spent on doing so.

Just before the Bali summit, in November 2007, President Susilo Bambang Yudhoyono told journalists: "In future, we have to be very determined in carrying out reforestation and preventing deforestation. We want to plant trees on a large scale - and each tree will absorb CO₂, the gas that the world fears. By doing this, we will be spending a lot of money on seedlings and looking after the forests for developed countries, so there should be compensation for this. We expect that in the new framework, such efforts will be taken into account... It would make no sense if there was nothing in return."¹⁶

On another occasion, the President (popularly known as 'SBY') said that preserving the nation's rich rainforests was potentially more economically rewarding than cutting them down. "By saving, regeneration and sustainably managing forests we are also doing our part in reducing global greenhouse gas emissions, while contributing to sustainable economic development of Indonesia", he said.¹⁷

Amidst much publicity, SBY launched a massive tree-planting initiative in the run-up to the international climate negotiations. Nearly 80 million saplings were to be planted on 'deforested land' and around people's homes throughout the country in just one week. If the scheme succeeds, the trees will cover an area of 900,000ha.¹⁸

At the Bali summit, SBY announced a national mitigation and adaptation plan, covering forestry, energy, agriculture, water resources, infrastructure and health. Measures proposed by the forestry department include mandatory tree planting for carbon storage, a requirement for a government permit to fell a tree with a diameter above 10cm and replacement planting of two trees for each one tree felled. The ministry's mitigation targets are: combating illegal logging, rehabilitation of forest land and conservation areas, restructuring the forestry industry, empowering local communities living near forests and improving institutions monitoring forests. Forest rehabilitation targets include 11 million hectares by 2009, a further 4.8 million ha by 2012, 16 million ha by 2025 and all remaining areas by 2050. The ministry also has targets for reducing deforestation and for reducing forest fires by 50% by 2009.¹⁹

Indonesia is also keen to participate in internationally funded REDD activities and is listed as one of 20 countries which has requested involvement in the FCPF.²⁰ Given the World Bank's involvement in funding preparatory studies by a forestry ministry led group, the Indonesia Forest Climate Alliance, it looks very likely that Indonesia will be a participant country.

In December the forestry department announced that the country was ready to implement pilot activities to trial various aspects of REDD. An official press release.²¹ said that studies by the Indonesia Forest Climate Alliance, funded by the World Bank and British, Australian and German bilateral funds, had prepared studies on the methodology, payment mechanisms and markets.²²

It said the pilot projects would take place between 2008 and 2012, and would be on national, provincial, district and local scales, with the aim of gaining experience of implementing REDD activities before the post-Kyoto agreement is implemented. REDD activities are expected to be included as part of the UNFCCC-sanctioned actions to mitigate climate change. The department said that the studies showed that REDD activities could be applied in pulpwood plantation areas, as well as production forests, conservation areas and peatlands.

What do these announcements mean for people on the ground? Probably not much positive until the real problems are tackled. The country's timber, pulp and oil palm entrepreneurs continue to eat into the remaining forests, reducing the resource base for local communities as they do so. At the same time, the government continues with policies that contradict its Bali commitments (see box, below). Massive expansion of oil palm plantations, partly in response to demand for agrofuels from developed countries, is leading to more climate-damaging forest and peatland destruction. The contradictions in promoting palm oil as a 'biofuel' have been well exposed, but it is still taking time for the message to get through to decision-makers both at production and consumption ends (see also EU energy policy article). Meanwhile, the basic need for recognition and respect of indigenous rights to land and resources continues to be a far lower priority than the powerful business interests involved in the timber, pulp and oil palm industries.

Carry on converting Indonesia's commitment to safeguarding the world's forests has apparently worn rather thin in the months since the Bali Summit as new measures are introduced that encourage, rather than prevent, deforestation.

Government Regulation No 2/2008, which follows up on a 2004 regulation (No 1) on mining in protected forests, is a case in point. The regulation, which sets prices for use of forest areas by industries other than forestry, caused widespread concern among Indonesian CSOs as it gives the green light for further forest conversion, for a range of different purposes, including mining. The low fees the government is charging have also caused concern as they in no way reflect the value of social and environmental services provided by the forests (see also Mining news in brief). Although denied by the government, many CSOs see the regulation as a tool to justify and legalise more forest conversion, which will speed up, instead of reduce, the deforestation rate.

This rate is already the world's highest at around 2 million hectares (or four times the size of Singapore) per year during 2000-2005.²³

Another contradictory measure is the forestry ministry's decision to reissue a logging licence covering part of the national park on the island of Siberut, West Sumatra, to company PT Salaki Summa Sejahtera (see DTE 50 for background). Four thousand hectares of the 49,000ha concession lies within the protected area. Forestry minister MS Kaban said he could guarantee that the conversion would not disturb the function of the reserve. The company's operations will be monitored by CSOs, universities and the Indonesia Institute of Sciences (LIPI), he said.²⁴

Meanwhile, illegal logging continues unabated. There have been many new cases in Riau, Aceh, South Sulawesi and Kalimantan this year. These operations are well-organised and involve government officials, the police and military, as seen in the Ketapang case. In the past two months, Indonesian police action to break up an illegal timber trading network in this West Kalimantan district has exposed the extent of illegal logging's stranglehold over the forests. 'Operation Hutan Lestari' has led to the arrest of at least 14 police officers (from district and provincial police stations) plus 26 others, ranging from government officials at Ketapang's forestry service to businessmen and middlemen. Twelve thousand cubic metres of logs worth around Rp208 billion (US$22.6 million), ready to be shipped in 19 vessels to Kuching in Malaysia, have been confiscated. During the investigations, the West Kalimantan police chief was transferred to national headquarters. He is considered negligent in supervising his staff, but is unlikely to face charges himself. Meanwhile, the fugitive owner of the ships, has been caught. Yet another high-ranking official, he is Adi Murdani, the current deputy district head of Kayong Utara, another West Kalimantan district.²⁵

Aceh's avoided deforestation scheme Indonesia's first forest carbon trading scheme will be developed in Aceh. Announced early in February, the scheme is intended to protect 750,000ha of forest in northern Aceh against logging and clearance for oil palm plantations. Around 130,000 people live in and around the Ulu Masen ecosystem. The project is a collaboration between Aceh's provincial government, the conservation organisation Fauna & Flora International and an Australian company, Carbon Conservation. It has secured funding worth US$9 million from US bank, Merrill Lynch.

The scheme has been certified by the Climate, Community and Biodiversity Alliance (CCBA) - the first project to be certified by the US-based body which includes conservation NGOs and corporations such as Intel and Weyerhauser. It will sell carbon credits to the voluntary carbon market and could benefit from a new post-2012 carbon market likely to be agreed at the UNFCCC Conference in Copenhagen next year.

Carbon Conservation is headed by Dorjee Sun, a millionaire internet businessman who has been instrumental in convincing the governors of Aceh and Papua of the bright future for forest carbon markets. Last year, Aceh's governor Irwandi announced a much-welcomed logging moratorium for Aceh's hard-pressed forests.²⁶ Among Sun's customers in the carbon market is the UK-based mining multinational Rio Tinto (see also Papua/extractives article), which - according to media reports - Sun wants to interest in Aceh and Papua schemes.²⁷

The Ulu Masen project plans to reduce logging by 85% and to generate carbon credits worth $16.5 million per year. It expects to generate $432 million over the next 30 years. Local villages that can demonstrate that forests have not been logged are projected to get $26 million over the first five years. The site will be monitored by forest wardens and by satellite imaging.²⁸

FFI claims that a wide range of stakeholders will be consulted in the project design and implementation, including traditional community leaders (mukim). A project design note²⁹ states that all benefits are shared equitably among all stakeholders, including forest dependent communities and those with customary (adat) rights to forest land. 

Meanwhile in Papua...

In May, Papua's governor Barnabas Suebu signed an MoU with PT Emerald Planet and its Australian partner New Forests Asset Management to assess the potential for forest carbon trading in Papua. NFAM said it would invest US$10 million to conduct research in Mimika, Mamberamo and Merauke, with carbon reserves of these three districts to be announced by the end of the year. Suebu said that of Papua's 31.5 million hectares of forests, 50% is for conservation, 20% for production and 30% for conversion, including plantations and agriculture. However, destructive logging and timber smuggling remain rampant.³⁰

Forestry minister Kaban described Papua's decision to go for carbon trading outside the national framework as a move to "sell our forests at a discount." He warned of 'vultures' who lure governors into making such agreements.³¹ It is hardly surprising that Aceh and Papua are the first provinces to engage with REDD schemes. Both provinces have a long history of resource exploitation which benefited Jakarta rather than local people. Now, under Special Autonomy, the elected governors want to generate their own funds for development.

Eight REDD schemes announced Indonesia's first official REDD scheme will be in a peatland area of Central Kalimantan, according to head of research and development at the forestry ministry, Wahjudi Wardojo. Funded by A$30 million in grants from Australia, the project is expected to start in June. People will be prohibited from cutting the forest, and canals will be built to prevent forest fires and to revitalise the peatlands, according to a report in the Jakarta Post. Kaban says Indonesia has received pledges of US$100 million from developed countries for its REDD activities, and will go ahead with pilot projects in eight forests this year.³² It remains to be seen how the Australia-funded project in Central Kalimantan will address concerns over indigenous rights and livelihoods expressed by Dayak communities living in peatland areas there (see box, above). 

Notes:
¹⁶ www.detiknews.com/index.php/detik.read/tahun/2007/bulan/11/tgl/28/time/201642/idnews/859026/idkanal/10
¹⁷ www.smh.com.au/news/World/Indonesia-treasures-rainforest-says-SBY/2007/12/10/1197135374339.html
¹⁸ Antara, 27/Nov/07, www.antara.co.id/redd/en/news/?id=1196164172
¹⁹ Jakarta Post 22/Dec/07
²⁰ Piloting a System of Positive Incentives for Reducing Emissions from Deforestation and Degradation (REDD). The Proposed Forest Carbon Partnership Facility, Powerpoint Presentation:
Benoît Bosquet, The World Bank. Women's Council on Energy and the Environment Washington, DC, September 27, 2007
²¹ Department of Forestry press release No.S.525/II/PIK-1/2007, December 2007.
²² A 2007 official Indonesian document on REDD can be viewed at www.cifor.cgiar.org/NR/rdonlyres/4E81DB28-410F-4885-ACB6-6CA802603A32/0/indonesia.pdf.
²³ www.fwi.or.id/?buka=artikel&NewsID=87. Other data shows an even higher deforestation rate.
²⁴ www.bktrn.org/gora.php?menu=isiberita&&id=75
²⁵ For further information see: www.suarakarya-online.com/news.html?id=196596
www.pontianakpost.com/berita/index.asp?Berita=Utama&id=156591
www.earthtimes.org/articles/show/197669,indonesian-police-officers-grilled-in-illegal-logging-case.html
²⁶ See DTE 74 for further background, plus our 2004 booklet for Eye on Aceh, Logging a Conflict Zone at www.aceh-eye.org/data_files/english_format/ngo/ngo_eoa/ngo_eoa_2004_10_00.asp
²⁷ Additional sources for this section: Pointcarbon.com 7/Feb/08; and Wall Street Journal 11/Mar/08
²⁸ Bloomberg 7/Feb/08
²⁹ Reducing Carbon Emissions from Deforestation in the Ulu Masen Ecosystem, Aceh, Indonesia, December 29, 2007 www.climatestandards.org/projects/files/Ulu_Masen_CCBA_Project_Design_Nov1.pdf
³⁰ Jakarta Post 14/May/08
³¹ Reuters, 6/Dec/07 viaWatch!Indonesia31
³² Jakarta Post 16/Apr/08
³³ Climate Change: Impacts on Indigenous Peoples and on their Territories and Lands in Indonesia, 7th Session of Permanent Forum on Indigenous Issues, 21 April - 2 May 2008.
³⁴ 'Langkah Dari Kampung Untuk Dunia', Press Release distributed via the NGO-Forestry-Sector-Partnership email list 5/Dec/07.