Norwegian finance for forest destruction in Indonesia. Oh, and where is the moratorium, by the way?

PHOTO Credit: Greenpeace.

REDD in Indonesia: We are still waiting for the forest moratorium that should have started on 1 January 2011. Greenpeace notes that the latest draft of the decree (needed to make the moratorium legally binding) “will fail to protect vital rainforests.” Meanwhile, Norway is investing in companies involved in forest destruction in the REDD pilot province, Central Kalimantan.

In January 2011, newspapers reported that the moratorium would start that month. “Govt to implement forest conversion moratorium in January,” was the headline reported by Antara News on 13 January 2011. A few days earlier, Kuntoro Mangkusubroto, head of the REDD-plus taskforce, had explained to the Jakarta Post that, “The President still needs to learn the [moratorium] concept better.”

It seems the President is still learning. Agus Purnomo, special advisor to President Susilo Bambang Yudhoyono on climate change, recently told the Jakarta Globe that “a team of officials drafting the instruction had reached a deal on key points of the moratorium.” The newspaper reported that President Yudhoyono would sign the moratorium in February 2011.

It is now March 2011 and we are still waiting. A little over three years ago, President Yudhoyono spoke at the UN climate conference in Bali. “The world is watching ,” he said. “I beg you, do not let them down.” Now the world is watching Yudhoyono to see whether he signs a decree for a two-year logging moratorium or allows loopholes in the legislation big enough to drive a fleet of bulldozers through.

Greenpeace is extremely critical of the most recent draft decree. Yudhoyono’s “proposed ‘moratorium’ will fail to protect 45 million hectares of natural forest and peatland,” Greenpeace states in a press release.

Yuyun Indradi, Greenpeace Southeast Asia Forest Campaigner, says,

“The proposed moratorium is utterly inadequate. It continues to allow the paper and palm oil industries to destroy Indonesia’s rainforests, carbon-rich peatlands and biodiversity. The Government needs to take effective action that will actually protect the rainforest and the lives that depend on them now; the forests cannot wait.”

Greenpeace has produced a series of maps, overlaying legally protected areas, proposed moratorium areas, and forests and peatlands at risk. The map of Central Kalimantan (right), is particularly interesting (and depressing, but at least it illustrates the sort of difficulties involved). The areas that would be off-limits under the moratorium are in black. Forests and peatlands at risk are in red. The vast number of overlapping concessions – that would not be affected by the moratorium in any of the draft versions – reveals clearly the scale of the problem.

The government of Indonesia chose Central Kalimantan as the pilot REDD province under the Indonesia-Norway US$1 billion forest deal. At the beginning of February 2011, the Jakarta Post announced that a joint government team would be investigating and (who knows?), perhaps even prosecuting hundreds of plantation and mining firms that are currently operating illegally in Central Kalimantan. The team, consists of officials from the Anti Judicial Mafia Taskforce, Forestry Ministry, Attorney General’s Office (AGO), National Police and Corruption Eradication Commission (KPK).

The Jakarta Post reported that of a total of 967 companies operating in the province, only 76 had permits to convert forest into plantations or mines. The Ministry of Forestry estimates that the state has lost a total of US$17.54 billion as a result of the companies illegally destroying the forest in just this province. Which puts Norway’s offer of US$1 billion to reduce deforestation somewhat into perspective.

Not surprisingly, the Ministry of Forestry is reluctant to accept any blame for the situation, despite the fact that under the 1999 Forestry Law, the Ministry of Forestry is responsible for issuing permits to companies to use (i.e. destroy) forests. The Forestry Minister, Zulkifli Hasan, told the Jakarta Post that under Indonesia’s process of decentralisation, local administrations are allowed to issue permits, although the local authorities are supposed to obtain permits from the Ministry of Forestry in Jakarta. The Jakarta Post reported Zulkifli as saying that “massive forest conversion, including in Central Kalimantan, occurred following many local administrations’ failures secure permits from Jakarta.”

A report just released by Greenomics Indonesia explains that a number of oil palm companies operating in Central Kalimantan are doing so without Forest Relinquishment Licenses and/or Timber Exploitation Licenses. These companies include companies owned by Golden-Agri Resources Ltd., Wilmar International, IOI, Sime Darby and Astra Agro Lestari.

Greenomics Indonesia also reveals a somewhat surprising investor in five of the companies operating in Central Kalimantan. Step forward the Norwegian government. Norway’s Government Pension Fund-Global has invested a total of US$183 million in shares in these five companies:

• Golden-Agri Resources Group, the palm oil arm of Sinar Mas (US$17.8 million);

• Wilmar International Group, Singapore (US$62.51 million);

• IOI Group, Malaysia (US$40.55 million);

• Sime Darby Group, Malaysia (US$56.92 million); and

• Astra Agro Lestari (US$5.17 million).

Greenomics Indonesia has a comment and a suggestion for the Norwegian government:

GAR, Wilmar International, IOI, Sime Darby, and Astra Agro Lestari are the parent companies of a large number of plantation firms that are operating in Central Kalimantan without Forest Relinquishment Licenses and/or Timber Exploitation Licenses.

The Government of Norway should take the time to study Indonesian forestry legislation and regulations, which would make it immediately clear that the operation of plantation companies in forest areas without Forest Relinquishment Licenses and Timber Exploitation Licenses constitutes a serious criminal violation of Indonesian forestry law.

Under the Indonesia-Norway REDD pilot project in Central Kalimantan, the administration cannot issue new permits for forest-destroying corporations. Will Norway also have to stop investing in companies involved in forest destruction?