Norway and Indonesia sign US$1 billion forest deal

PHOTO Credit: Norway’s Prime Minister’s Office.

Yesterday, Norway’s Minister of the Environment and International Development Erik Solheim and Indonesia’s Foreign Minister RM Marty M. Natalegawa signed a US$1 billion deal aimed at reducing deforestation in Indonesia.

There are few details about the deal available so far. The agreement itself has not yet been made public – when it is REDD-Monitor will post it here.

A press release from the Norwegian government indicates that the deal will not mean an end to the destruction of Indonesia’s peatland forests. No existing contracts will be affected. Instead, “A two-year suspension on new concessions on conversion of natural forests and peat lands into plantations will be implemented.” The press release does not explain what will happen after two years – whether new concessions will then be allowed once again.

“By 2014,” the Norwegian press release states, “the plan is to move to an Indonesian-wide instrument of funding contributions in return for verified emission reductions.” Norway, it seems, keen to buy Indonesia’s REDD credits. The Norway-Indonesia forest deal comes the day before Norway’s follow up to the closed door meeting in Paris in March, the “Oslo Climate and Forest Conference 2010”. On the opening of the meeting, Norwegian NGOs produced a statement demanding that forests be kept out of the carbon markets.

Another statement from civil society and indigenous peoples’ organisations came out on the eve of the conference.

If the interim REDD+ Partnership focuses narrowly on emissions reductions and ignores the potential effects of REDD on human rights, biodiversity and poverty, it sets itself up for failure and could easily do more harm than good.

We wish to state clearly that the process leading up to the REDD+ Partnership Agreement has been far from transparent and participatory. Although we recognize the efforts of some countries to make the process more inclusive, indigenous peoples, local communities and civil society organizations have not been able to participate in an informed and meaningful manner.

While the Norwegian government has been keen to emphasise the importance of consultation and participation in the build up to its meeting in Oslo, it is not clear whether any consultation took place with civil society or Indigenous Peoples before the the billion dollar deal was signed with Indonesia. A short article in Bloomberg, dated 17 May 2010, about the then-proposed deal was the first that many NGOs heard about the deal going ahead.

Rainforest Foundation Norway put out a press release commenting that “This could be an important step towards the preservation of Indonesia’s rainforest”. Lars Løvold, Director of Rainforest Foundation Norway said that “The agreement contains important measures that aim to reduce greenhouse gas emissions from deforestation in Indonesia and this is very good news. Rainforest Foundation Norway (RFN) is nevertheless alarmed by the lack of specific measures on the conservation of biodiversity and protection of the rights of indigenous peoples who live in and around the forest.”

Abdon Nababan, secretary general of AMAN (The Indigenous Peoples Alliance of Indonesia) is quoted in both press releases. In the Norwegian government’s press release he sounds very optimistic:

“In a declaration of support for the partnership, Mr. Abdon Nababan, secretary general of AMAN, the nation-wide indigenous peoples alliance in Indonesia, stated that ‘Indigenous peoples of Indonesia support this Partnership, and will contribute to the planning and implementation of the measures, provided we can continue to exercise our rights and traditional knowledge to have sustainable livelihood from forest ecosystems.'”

In Rainforest Foundation Norway’s press release, Abdon is somewhat more critical:

The indigenous peoples’ alliance of Indonesia (AMAN) welcomes Norway’s initiative if indigenous peoples’ rights are respected in the implementation of the agreement. ‘Norway has been a driving force to ensure the rights of indigenous peoples internationally, and this should also have been part of the bilateral agreement with Indonesia. AMAN supports the initiative on condition that Indonesia will recognize indigenous peoples and ensure this in national legislation,’ said Abdon Nababan, Secretary General, AMAN.”

In February 2010, RFN issued a series of “Recommendations regarding bilateral cooperation between Norway and Indonesia on REDD”. In its press release Rainforest Foundation Norway notes that “some of these recommendations have been included in the agreement, such as the requirement to ban the establishment of new plantations in natural forests.”

That’s the good news. The bad news is that “several of RFN’s key recommendations have not been included in the agreement text, such as an explicit recognition of indigenous peoples rights, including their land rights. Neither is there any agreement to establish a complaint mechanism for local communities and others who may be negatively affected by the measures taken.”

Another of RFN’s recommendations is that Papua should be targeted as one of the first provinces to implement REDD, otherwise, “it is highly likely that much of this forest will disappear before a national REDD structure is in place.” RFN notes that,

“There is a danger that Indonesia will implement REDD measures in already degraded and deforested areas such as Sumatra and Central Kalimantan, while massive expansion of tree and oil palm plantations in remaining natural forest of Papua will continue unabated.”

Unfortunately, this seems to be precisely what is happening. In January 2010, Indonesia’s President Susilo Bambang Yudhoyono, launched the 1.6 million hectare Merauke Integrated Food and Energy Estate programme. Under this programme a vast area of Papua’s forests is planned to be converted to rice and wheat fields and oil palm plantations. Walhi (Friends of the Earth Indonesia) describes the project as a “land grab”. The project will bring in huge numbers of workers, leading critics to compare it to the disastrous Transmigration Programmes under General Suharto’s regime.

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The following documents related to the Norway-Indonesia deal are posted below:

• Rainforest Foundation Norway’s press release, 26 May 2010

• Rainforest Foundation Norway’s February 2010 recommendations

• Norwegian NGOs’ statement about the Oslo conference, 27 May 2010

• Statement of civil society and indigenous peoples’ organisations, 26 May 2010

Press Release:

Norway and Indonesia agree a US$ 1 billion partnership on forests:

– This could be an important step towards the preservation of Indonesia’s rainforest

Norway and Indonesia today announced a US$ 1 billion bilateral agreement on reducing deforestation.

“The agreement contains important measures that aim to reduce greenhouse gas emissions from deforestation in Indonesia and this is very good news. Rainforest Foundation Norway (RFN) is nevertheless alarmed by the lack of specific measures on the conservation of biodiversity and protection of the rights of indigenous peoples who live in and around the forest”, said Lars Løvold, Director of Rainforest Foundation Norway.

Prime Minister Stoltenberg and Indonesian President Yudhoyono signed the agreement in Oslo today. Meanwhile, several non-governmental organizations from Indonesia are in Oslo to attend a meeting on forest protection arranged by RFN. The representatives from Indonesia welcome the positive elements of the agreement, such as the two-year suspension on new concessions for the conversion of natural forests into plantations. The dramatic growth in oil palm and timber plantations is one of the main causes of deforestation in Indonesia.

“Indonesia has committed to ban new concessions on conversion of natural forest to establish plantations, and this is very positive. Nonetheless, much of the rainforest destruction in Indonesia will be allowed to continue unabated. To ensure genuinely effective protection of rainforests the agreement should have required a ban on all new logging permits in natural forests,” said Steni Bernadinus, from HuMa, Indonesia.

The indigenous peoples’ alliance of Indonesia (AMAN) welcomes Norway’s initiative if indigenous peoples’ rights are respected in the implementation of the agreement.

“Norway has been a driving force to ensure the rights of indigenous peoples internationally, and this should also have been part of the bilateral agreement with Indonesia. AMAN supports the initiative on condition that Indonesia will recognize indigenous peoples and ensure this in national legislation” said Abdon Nababan, Secretary General, AMAN.

Prior to this announcement, RFN provided detailed recommendations to the Norwegian government on requirements that must be in place to ensure that Norwegian money has a positive impact. Some of these recommendations have been included in the agreement, such as the requirement to ban the establishment of new plantations in natural forests.

It is also encouraging that Indonesia has agreed to independent monitoring of the implementation of the agreement, and that the funds will be managed by an internationally reputable financial institution in which local communities and indigenous peoples will be represented.

Unfortunately, several of RFN’s key recommendations have not been included in the agreement text, such as an explicit recognition of indigenous peoples rights, including their land rights. Neither is there any agreement to establish a complaint mechanism for local communities and others who may be negatively affected by the measures taken.

Indonesia and Norway will now prepare a detailed plan for how the agreement will be implemented in practice, due to be finalized in October.

“Better protection of indigenous peoples’ rights and protection of natural forests and biodiversity must be included in the detailed implementation plan. Assuming that this is in place, the bilateral agreement would be an important step towards rainforest protection in Indonesia,” said Lars Løvold.

• Deforestation in Indonesia is one of the world’s highest, with an annual deforestation rate of approximately 2 percent. The deforestation of carbon rich peat forests contributes significantly to the emissions.

• In September 2009, President Yudhoyono promised to reduce Indonesia’s green house gas emissions with 26 % by 2020 compared to business as usual, and with sufficient international support, with 41 %, the vast majority from the forestry sector.

• The forest sector in Indonesia has been described as a prime example of governance failure, as it is characterized by high levels of corruption, lack of transparency, weak law enforcement, extensive illegal logging and power struggles between different levels of government.

• Lack of recognized land rights has been a major source of conflict between local communities, the Indonesian government and commercial companies. Many Indonesian civil society organisations have for years demanded a profound reform of forest legislation and management.

• RFN and its partners aim to ensure that the rights of indigenous peoples and forest dwellers and protection of biodiversity are included in national and provincial REDD strategies in Indonesia.

To: The Norwegian Government’s Climate and Forest Initiative

February 12th 2010

Rainforest Foundation Norway’s recommendations regarding bilateral cooperation between Norway and Indonesia on REDD

The Government of Norway has recently entered into dialogue with the Government of Indonesia on a potential bilateral agreement on REDD.

Deforestation in Indonesia is one of the world’s highest, with an annual deforestation rate of two percent. The deforestation of carbon rich peat forests contributes significantly to the emissions. Norway initiated talks with Indonesia after Indonesia’s President Yudhoyono in September 2009 pledged to reduce the country’s green house gas emissions with 26 % by 2020 compared to business as usual. The vast majority of the reductions are to come from the forestry sector.

RFN welcomes the initiative taken by Indonesia and Norway, but is concerned that REDD investments in Indonesia will fail without substantial reforms in the forestry sector. Below, we present some action points which we argue are crucial to include in an agreement between the two countries.

Governance and Transparency

The REDD process in Indonesia has so far been handled by the Ministry of Forestry, with minimal involvement by other ministries. It is critical to develop a cross-sectoral strategy with broad ownership, as significant drivers of deforestation result from policies outside the authority of the Ministry of Forestry, such as oil palm plantations and mining. Indonesia should take the following steps:

• Establish a ‘national REDD authority’ under the National Climate Change Council (DNPI), reporting directly to the president, charged with and authorized to run the Indonesian national REDD efforts, supervise the relevant activities of the various government ministries and coordinate international support.

• Finalize a national REDD strategy within the framework of a national low carbon development strategy. The strategy must be transparent on process, decisions, data and systems for MRV, and ensure full and effective participation by all relevant stakeholders.

• Conduct a thorough assessment of the existing legal framework related to land and forest, including laws and regulations related to land rights and tenure systems, and based on this;

  • Revise across sectors laws and regulations in contradiction with the aim of protecting natural forest

  • Assess the legality of all existing plantation and logging concessions, cancel existing concessions granted outside the law and enforce the law on illegal logging

  • Revise provincial spatial plans in accordance with the national REDD strategy

• Ensure industry-wide adherence to legal instruments and sustainable management of forests

• Establish a model for result based financing based on progress according to multiple criteria such as governance, implementation of rights, participation, protection of traditional livelihoods and knowledge, biodiversity, proxy indicators of deforestation and degradation, and carbon emissions.

The governance record in the forest sector in Indonesia is poor, with high rates of illegal logging, corruption and trafficking of timber. There is a critical need to strengthen capacity for financial management and revenue administration at all levels, and develop independent MRV on financial mechanisms. It is necessary to

• Build capacity to manage finances and administer revenues.

• Strengthen institutions to deal with corruption and fraud.

• Establish models for revenue sharing and equitable distribution of benefits in accordance with the rights and interest of indigenous peoples and local communities.

• Impose robust due diligence and accountability on recipients of public finance

• Establish effective and independent MRV on financial mechanisms and benefit sharing

MRV Beyond Carbon

Currently, there exists no reliable data on forest cover and status on national level in Indonesia. Estimates of forest loss vary considerably, there are reports of significant illegal logging and corruption, and the civil society’s ability to hold government accountable is curtailed by a lack of access to public information. The Ministry of Forestry recently shelved a three-year data collection project by its own Forest Monitoring and Assessment System. REDD in Indonesia cannot succeed without the establishment of a robust and transparent MRV system.

Indonesia’s REDD strategy must entail a thorough revision of the forestry sector and legal framework on land and forest. Hence, performance must be measured based on a broader set of parameters than just carbon emissions. The MRV system must

• cover social impacts and safeguards as well as emissions reductions, including: governance, implementation of rights, participation, proxy indicators of deforestation and degradation, biodiversity; traditional livelihoods and knowledge,

• recognize indigenous peoples and local communities as key actors in the MRV process from design to implementation, contingent on their free, prior and informed consent,

• be subject to independent monitoring

Biodiversity and Environmental Integrity

Official documents outlining strategies for REDD in Indonesia, such as the RPP submitted to the FCPF and the Second National Communication under the UNFCCC, hardly mention initiatives to protect natural forest, and focus almost exclusively on extensive expansion of industrial tree plantations. Indonesia has so far issued three regulations on REDD (on demonstration activities, generally on REDD and on financing). None of these deal with the underlying drivers of deforestation. It is urgent to

• Institute a moratorium on new logging and plantation concessions, and an immediate, permanent ban on any and all further clearing and/or conversion of peat lands

• Immediately initiate a thorough and independent assessment of forest cover and status, as well as existing concessions and their legality

• Develop and implement concrete measures within a national REDD strategy that will protect natural forest and take steps to counter all significant drivers of deforestation and degradation, including:

  • Overcapacity of pulp and paper mills.

  • Policies that promote forest and peatland clearing, especially for pulp and paper and palm oil plantations, but also mining, infrastructure and transmigration

  • Regional displacement of emissions

Rights and Participation

The FCPF identified consultation and participation as the weakest points in Indonesia’s RPP. The national REDD process has been widely criticized by the civil society for excluding their participation, opinions and concerns. The UN Committee on Elimination of Racial Discrimination (CERD) has criticized Indonesia’s Regulation on Implementation Procedures for REDD, which it claims “appears to deny any proprietary rights to indigenous peoples in forests”. CERD further notes that “Indonesia continues to lack any effective legal means to recognize, secure and protect indigenous peoples’ rights to their lands, territories and resources.”

• A national REDD strategy must respect and promote the rights of local communities and indigenous peoples, and ensure their full and effective participation from design to implementation

• Establish a truly inclusive, transparent, multi-stakeholder national REDD process that will become a permanent feature of REDD in Indonesia.

• Address rural land rights issues and tenure insecurity in accordance with international standards.

• Establish a complaint mechanism accessible to local communities and indigenous peoples

Scale

In official documents such as the RPP it is stated that Indonesia’s approach to REDD will be national accounting with sub-national implementation. Unfortunately there are few suggestions on how lessons from limited pilot projects will be scaled up to a province, island or national scale. So far, around 20 pilot projects have been initiated around the archipelago. There is a danger that Indonesia will implement REDD measures in already degraded and deforested areas such as Sumatra and Central Kalimantan, while massive expansion of tree and oil palm plantations in remaining natural forest of Papua will continue unabated.

• Indonesia should immediately finalize a national REDD strategy within the framework of a national low carbon development strategy. The strategy should specify how projects will be scaled up to a province, island and finally national scale.

• To speed up the implementation of a national strategy, Norway should encourage the establishment of two province-wide pilots

  • One province could be the UNREDD pilot province. A collaboration with UNREDD will contribute to harmonization of a REDD architecture in Indonesia, in which other donors should be encouraged to participate. It would at the same time contribute much needed funds to the UNREDD effort in Indonesia and allow for real and useful lessons learned from the UNREDD pilot province

  • The second province should be Papua, where the largest remaining intact tracts of natural forest remain. Unless Papua is targeted as one of the first provinces to implement REDD, it is highly likely that much of this forest will disappear before a national REDD structure is in place.

Yours sincerely,

Lars Løvold

Director,
Rainforest Foundation Norway

On the opening of the Oslo Climate and Forest Conference, May 27th 2010, Norwegian NGOs has the following message for government representatives attending the meeting:

Forests need real emission reductions – Keep forests out of carbon markets

Stopping deforestation is crucial in fighting climate change. But it is not enough. The world’s forests will continue to be threatened by the impacts of a changing climate unless industrialized countries commit to deep reductions in their fossil fuel emissions.

Northern countries must live up to their historical responsibility by contributing to efforts to stop deforestation while also significantly strengthening their commitments to reduce domestic emissions. To ensure this, efforts to reduce emissions from deforestation and forest degradation in developing countries must be financed outside the carbon offset market.

Forests need a partnership for all
– Principles for real solutions to deforestation

Indigenous peoples and local communities have protected their forests against deforestation and degradation for centuries. Real solutions to deforestation must respect their rights, and ensure their full and effective participation on all levels.

Natural forests contain far more carbon and biodiversity than plantations and industrially logged forests. Real solutions to deforestation must ensure the conservation of natural forests, and not reward logging or conversion – plantations are not forest!

To achieve real solutions to deforestation and forest degradation in developing countries, we need a partnership for all: inclusive, rights-based processes that create new forms of cooperation, with strong safeguards to protect human rights and biologically diverse natural forests. We call on all governments present in Oslo to build this partnership.

Oslo, May 27, 2010,

Norges Naturvernforbund (Friends of the Earth Norway)
Natur og Ungdom (Young Friends of the Earth Norway)
Regnskogfondet (Rainforest Foundation Norway)
ForUM (The Norwegian Forum for Environment and Development)
Greenpeace
Framtiden i våre hender (The Future in Our Hands)
Kirkens Nødhjelp (Norwegian Church Aid)
Changemaker
Spire

Statement on Redd and Partnership agreement Oslo May 26th.

Statement of civil society and indigenous peoples’ organizations regarding the “REDD+ Partnership Agreement”

26 May 2010

From May 24 through 28, 2010, representatives of indigenous peoples’ and civil society organizations from 9 tropical forest countries are gathered in Oslo to share experiences and strategies related to forest protection and climate change. The countries are: Bolivia, Brazil, Democratic Republic of Congo, Ecuador, Guyana, Indonesia, Papua New-Guinea, Paraguay and the Republic of Congo.

As Heads of State and ministers of many countries will also be in Norway for the Oslo Climate and Forest Conference on May 27th, we take the opportunity to voice our opinions and concerns about REDD (Reducing Emissions from Deforestation and Forest Degradation) and the interim “REDD+ Partnership”.

There is an urgent need to stop the destruction of tropical forests, not only to prevent dangerous climate change but also to protect biological diversity and the rights and livelihoods of hundreds of millions of people, especially indigenous peoples. We recognize the need to coordinate international efforts to protect forests, but we reiterate that a bad REDD system is worse than no system at all for the world’s climate, its forests and its people.

If the interim REDD+ Partnership focuses narrowly on emissions reductions and ignores the potential effects of REDD on human rights, biodiversity and poverty, it sets itself up for failure and could easily do more harm than good.

We wish to state clearly that the process leading up to the REDD+ Partnership Agreement has been far from transparent and participatory. Although we recognize the efforts of some countries to make the process more inclusive, indigenous peoples, local communities and civil society organizations have not been able to participate in an informed and meaningful manner.

Indigenous peoples and local communities are traditional forest stewards and have collective, customary rights to their forests and resources. As they will be most directly affected by REDD activities, their full and effective participation must be ensured when REDD policies are being designed and implemented, in accordance with the principle of Free, Prior and Informed Consent.

We are extremely concerned that the REDD+ Partnership Agreement does not explicitly recognize that all REDD strategies and related activities must comply with international human rights instruments. Indigenous peoples’ and other local communities’ rights, including collective rights to territories and natural resources must be respected, protected and fulfilled.

We wish to emphasize that the UN Framework Convention on Climate Change is the only legitimate forum for international climate negotiations, and the “REDD+ Partnership” must support and be accountable to the UNFCCC process.

We have the following demands to the Heads of State and ministers gathered to form the “Interim REDD+ Partnership”:

Any REDD strategies and activities must:

• Comply with international environmental and human rights conventions and instruments, like the United Nations Declaration on the Rights of Indigenous Peoples, ILO Convention 169 and the Convention on Biological Diversity.

• Ensure the full and effective participation of civil society, indigenous peoples and local communities.

• Respect and uphold the right to Free, Prior and Informed Consent of indigenous peoples.

• Respect and protect the traditional knowledge, way of life and well-being of indigenous peoples.

• Exercise and take measures to ensure good governance, and guarantee transparency, accountability and fair and equitable benefit sharing.

• Focus on protecting natural forests, and not in any way support industrial logging, plantation development or other socially and environmentally degrading activities.

• Be additional to deep, legally binding emissions reduction commitments by developed countries, in order to prevent dangerous climate change. REDD must not be used as an offset mechanism.

• Address all drivers of deforestation, including industrial logging, oil and mineral extraction and industrial-scale agriculture.

• Be financed by “new money”; funds that are additional to official existing development assistance.