January 5, 2011 / 7:53 AM / 7 years ago

Indonesia divided over forest moratorium, misses Jan start

 * Moratorium on forest clearing not yet signed into law
 * Authorities differ on what ban will cover
 * Plantation, mining firms face uncertainty on permits
 By Olivia Rondonuwu	
 JAKARTA, Jan 5 (Reuters) - Indonesia's government is still 
trying to thrash out the details of a two-year moratorium on 
forest clearing under a $1 billion climate deal with Norway, 
leading it to miss a planned January 1 start and continued 
uncertainty for plantation firms.	
 The divergence of views between different Indonesian 
government ministries mirrors the inability of nations to 
agree a concrete pact to limit global greenhouse gas emissions 
at U.N. talks in Cancun last month.  	
 While the government still hopes to finalise the ban in 
coming weeks, the potential for further delays or a 
watered-down version of a much-lauded bilateral agreement 
would be another blow for global efforts to slow climate change.	
 The delay means continued uncertainty for palm oil, pulp 
and paper and mining firms hoping to expand. 	
 At issue are different views on how much forest and what 
type of forest to include in the ban. There is also 
uncertainty on whether to allow holders of existing permits to 
clear forest to go ahead or to compensate them instead. 	
 "We are dealing with so many stakeholders, so in a 
democratic process we need negotiation, discussion, 
compromises -- as long as the principle is still being held we 
are on the right track," Kuntoro Mangkusubroto, a respected 
technocrat who heads the president's special delivery unit, 
told Reuters.	
 The dispute shows the difficulties for Indonesia of 
slashing emissions while still spurring economic growth, as 
the country earns billions each year from cutting down forests 
to sell timber, paper and palm oil.	
 Mangkusubroto, tasked with steering the climate deal with 
Norway, and the forestry ministry have submitted competing 
drafts for the proposed moratorium, seen by Reuters, and the 
decision on how to proceed now rests with President Susilo 
Bambang Yudhoyono.	
 He has to choose between two starkly differing drafts: the 
forestry ministry wants the ban only on new permits to clear 
primary forests and peatlands for two years, while the 
presidential delivery unit wants it to include secondary 
forests, to review existing permits and consider extending the 
 Primary forests are untouched while secondary forests have 
been selectively logged, though boundaries are often unclear 
and illegal logging is rampant in one of Asia's most corrupt 
countries. Forests soak up the main greenhouse gas carbon 
dioxide (CO2).	
 Peatlands emit huge quantities of greenhouse gases if 
drained and cleared, and heavy deforestation led the World 
Bank to name Indonesia the world's third largest emitter in 
 Yudhoyono aims to slash 26 percent of the country's 
emissions by 2020 versus business-as-usual levels, or 41 
percent with international support. The Norway deal, which 
rests on emissions cuts from saving forests being proven, was 
heralded as an example of how bilateral deals could help fight 
climate change.	
 Plantation and mining firms have opposed the moratorium, 
which could slow the expansion of firms such as Astra Agro 
Lestari and delay coal and mining projects worth $14 
billion by the likes of BHP Billiton .	
 So far there are few signs that palm oil exports from the 
world's largest producer will be hit. Indonesia's trade 
minister said on Wednesday palm oil exports are expected to 
grow 16 percent in value this year amid new investment in the 
 However, the draft from Mangkusubroto calls for a review 
on existing permit holders, though firms would be excluded if 
they have already invested in projects by December 2010 and 
the forest was heavily damaged.	
Mangkusubroto said he is preparing incentives and 
compensation for firms such as land swaps.	
 "We cannot just leave them like that. We have to give them 
options," he said.	
 On the other hand, forestry minister Zulkifli Hasan, a 
politician from a political party allied with Yudhoyono, told 
Reuters he wanted the freeze applied only to new permits to 
maintain business and legal certainty.	
 "Businesses which already hold permits can go ahead, we 
cannot and may not stop them, because we have exploited (the 
forest) for 40 years, so there are many firms who hold forest 
permits," Hasan said in an interview.	
 The ministry has identified 35 million hectares (87 
million acres) of land that can be used selectively for 
business, and nine plantation firms have submitted requests to 
use 320,000 hectares of forest.	
 He added the ban will still protect 43.8 million hectares 
of primary forests and half of the 20 million hectares of 
peatlands, while applying sustainable forest management 
practices to another 48.5 million hectares.	
 "This is already January 2011 and after seven months of 
discourses and reviews in the public and within the 
government, the government is yet to produce a clear strategy 
and legal framework," said Fitrian Ardiansyah, forest climate 
policy analyst at WWF.	
 (Additional reporting by Chris White; Writing by Neil 
Chatterjee; Editing by David Fogarty)	
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