May 20, 2011 / 10:30 AM / 9 years ago

FACTBOX-Indonesia's moratorium on forest clearance

May 20 (Reuters) - Indonesia’s two-year moratorium on new permits to clear primary forest took effect on Friday, giving developers of plantations, energy resources and projects to cut emissions more clarity on their ability to expand in the archipelago.

The moratorium revealed a long list of exemptions, a concession to the plantation industry in the world’s top palm oil producing nation that vexed green groups. [ID:nL4E7GK0I2]

Here are facts about the moratorium:

* The moratorium, an instruction signed by President Susilo Bambang Yudhoyono, orders ministers and government offices to suspend the processing of permits to log and convert forest, including for timber and palm oil, in primary forests and peatlands in the following government categories: conservation forest, protected forest and production forest. Secondary forests, which have been touched by human activity, in these areas can still get permits.

It was not clear if there would be any sanctions if the presidential instruction is not followed, or firms developed land covered by the moratorium ban. This opens up the risk of poor implementation in a country with rampant corruption and weak law enforcement.

* The moratorium is part of a $1 billion climate change deal signed with Norway in 2010 to reduce greenhouse gas emissions from deforestation, though only $30 million of this has been disbursed so far, with the bulk contingent on emissions reductions.

The moratorium lasts two years but could in theory be extended. Its implementation will be overseen by a task force on Reducing Emissions from Deforestation and Forest Degradation (REDD) piloted by reform-minded technocrat Kuntoro Mangkusubroto.

* It includes 64.2 million hectares (158 million acres) of primary forest and more than 30 million hectares of peatlands, some of which are already damaged. No compensation is offered in the moratorium to firms unable to expand in this area, though the government has allocated another 35 million hectares of “degraded forest” as available for business use.

* It provides for exemptions including:

- Firms that already hold permits or have approval in principle from the forestry minister for permits to log and convert forest.

The moratorium is not clear on which kind of the myriad of permits this refers to. But a source familiar with the sector told Reuters this includes Hak Guna Usaha (HGU) permits that allow land use for business. Permits from a local government to secure a location within the moratorium area would still be subject to the ban, the source said.

- The extension of existing permits.

- Projects to develop geothermal and other power plants, oil and gas fields, sugar and rice plantations.

- Ecosystem restoration

* The government will update every six months a map of its forests in a bid to sort out overlapping permits in the sector. The map will be published to help investors clarify which forest areas are still on offer and which are not. (Reporting by Olivia Rondonuwu; Editing by Neil Chatterjee and Ramthan Hussain)

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