Jakarta State Administrative Court overturns decision to revoke Rimba Raya REDD project’s license
Rimba Raya Conservation terminated cooperation with InfiniteEARTH in 2023.
The Rimba Raya Biodiversity Reserve Project is the largest source of retired carbon offsets in the world. In 2023, Indonesia’s ’s Ministry of Environment and Forestry revoked the project’s permit for violating local regulations.
Since 2013, Rimba Raya has issued 33.6 million carbon credits, and 25.8 million of those have been retired, according to data from CarbonPlan.
In 2021, shortly before COP26 in Glasgow, Indonesia’s finance minister, Sri Mulyani Indrawati, announced a moratorium on sales of post-2020 carbon credits internationally. She stated that the country would not allow international carbon trading until its own domestic targets were met.
In May 2024, Carbon Pulse reported that Indonesia would end the moratorium at the end of this year, based on information from a “source close to the matter”.
The Rimba Raya project has not issued any carbon credits on Verra’s registry since 1 April 2021.
The Indonesian company PT Rimba Raya Conservation holds the license for the project and a Hong Kong-based company called InfiniteEARTH Limited is the project developer and sells the carbon credits from the project.
Falling prices
In May 2024, S&P Global reported that prices of carbon credits from Rimba Raya were already falling in late 2023. Several carbon traders told S&P Global that plans to revoke the project’s license may have been known before the government made an official statement in March 2024.
A Singapore-based trader told S&P Global that,
“We suspected that some sellers seized the time window and sold their credits to buyers who were unaware of what happened. Such information asymmetry damages fair play in the market. What really annoys me is the lack of transparency and timely communication for such an important announcement.”
Another Singapore-based trader told S&P Global, “I think people will think twice about doing carbon projects in Indonesia going forward.”
In fact, as long ago as August 2021, Indonesia’s Minister of Environment and Forestry, Siti Nurbaya, expressed concerns about the Rimba Raya project. ForestHints reported that,
Minister Nurbaya stressed that she was undertaking efforts to prevent PT RRC, in its capacity as a forestry company established under Indonesian law, from operating in the corridor of illegalities, especially when it comes to its carbon deals with third parties.
Rimba Raya Conservation terminated cooperation with InfiniteEARTH in 2023
On 6 May 2024, Rimba Raya Conservation issued a press release stating that:
Rimba Raya acknowledges that its Forestry Business Utilization License (PBPH) has been revoked by the Minister of Environment and Forestry of the Republic of Indonesia through the issuance of Minister of Environment and Forestry Decree Number: SK.1028/MENLHK/SETJEN?HPL.1/9/2023 dated September 15, 2023 ("MOEF Decree 1028/2023"). While it regrets MOEF's decision issuing MOEF Decree 1028/2023, Rimba Raya maintains that it has always been fully compliant with Indonesian regulations on carbon trading.
Rimba Raya Conservation announced that it had terminated its cooperation with InfiniteEARTH in 2023.
The press release states that,
While Rimba Raya previously cooperated with Infinite Earth Limited, Rimba Raya has terminated this cooperation since 2023.
Infinite Earth Limited no longer has a role within the Rimba Raya carbon project and its unilateral claim of the Rimba Raya project as its own is a flagrant misrepresentation of facts that should not be tolerated. Such claims have been misrepresented to both the media and MOEF through its unlawful attempt to register the Rimba Raya project in Indonesia's national carbon registry, the National Registry System for Climate Change (SRN-PPI) under Infinite Earth Limited's Indonesian subsidiary, PT. Infinite Earth Nusantara, which is entirely unaffiliated with Rimba Raya.
In May 2024, REDD-Monitor asked InfiniteEARTH some questions about the revoked license. InfiniteEARTH did not mention that Rimba Raya Conservation had terminated the partnership in 2023.
InfinteEARTH responded as if the agreement were still in place:
We cannot comment on the revocation of PT Rimba Raya Conservations’s concession license, as they have yet to inform us of such, which is a direct violation of our collaboration agreement, if true.
Jakarta State Administrative Court decisions
Rimba Raya Conservation filed a lawsuit challenging the revocation of its license in the Jakarta State Administrative Court.
On 16 May 2024, the Jakarta State Administrative Court made an interim decision ordering the Ministry of Environment and Forestry to suspend the revocation of the license.
On 17 May 2024, Verra suspended InfiniteEARTH’s registry account for the Rimba Raya project and gave the project developer seven days to respond to Verra’s questions, about the revocation of the license, the status of InfiniteEARTH’s role in the project, and InfiniteEARTH’s relationship with Rimba Raya Conservation.
On 21 May 2024, Carbon Streaming, which in August 2021 signed a deal with InfiniteEarth to buy 57.3 million carbon credits over the next 20 years, announced that for the three month period that ended 31 March 2024, “the Company determined the fair value of the Rimba Raya Stream to be nil due to the Concession License revocation”.
On 11 July 2024, Bloomberg reported that the Jakarta State Administrative Court had overturned the government’s decision to revoke the license. The Ministry of Environment and Forestry did not respond to Bloomberg’s request for comment. The Ministry will have a right to appeal the ruling.
Rimba Raya Conservation had cut staff after the license was revoked. Rusmin Widjaja, Rimba Raya Conservation’s president, told Bloomberg that the company will now attempt to rebuild capacity at the project. He also told Bloomberg that Rimba Raya Conservation is seeking to resolve a dispute with InfiniteEarth.