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Indonesia to revoke palm oil concession licenses under forest deal

Indonesia will revoke existing forestry licenses to cut down natural forests under the billion dollar deal climate deal signed with Norway last week, reports Reuters.

Agus Purnomo, head of the secretariat of Indonesia’s National Climate Change Council, told Sunanda Creagh of Reuters that part of the billion dollars pledged by Norway would be used to compensate palm oil developers and timber companies that would lose forest concessions under the emissions mitigation program. Compensation would come in the form of cash and land swaps in other areas.

“When you revoke licenses, when you cancel things, it involves money,” Purnomo was quoted as saying. “It’s not that we will cancel all licenses but (only) if there is a need to do so” in order to preserve primary forest.

Oil palm plantation development on peatlands in Kalimantan (Indonesian Borneo) in May 2010. Photo by Rhett A. Butler.

Purnomo said that palm oil and pulp and paper companies would be most affected by the plan.

“But I am not ruling out any possibility. The spirit of the agreement was to save the remaining natural forest and peatland and we will do whatever humanly possibly to make it happen, within the legal context of Indonesia,” he told Reuters.

“If we have to go through cancellations in the court system, we will do it.”

Concession holders will be informed within six months whether their permits will be revoked. Holders must have a valid permit to receive compensation.

“Some of them don’t have a valid permit, they are just making a claim,” he said. “If they don’t have a valid permit, we are not going to compensate. If they are getting it through bribery, we are not going to give [compensation].”


Meeting in Oslo, Norway last week, Indonesian president Susilo Bambang Yudhoyono announced a two-year moratorium on new concessions in peatlands and virgin forest areas. At the meeting, Norway said it would provide $1 billion in finance for forest conservation efforts in Indonesia, while other industrialized nations — including United States, France, Germany, Britain, Australia, and Japan — also made substantial commitments ($4 billion in total) to launch a program to reduce deforestation and forest degradation worldwide. The scheme — dubbed REDD+ — would pay tropical nations to conserve and sustainably manage their forests.

Rainforest in North Sumatra. Photo by Rhett A. Butler.

Trailing only Brazil in annual forest loss and losing more than 1 million square kilometers (418,000 sq mi) of forest between 2000 and 2005, Indonesia is viewed as a key participant in efforts to reduce global deforestation and slow climate change. More than 80 percent of Indonesia’s emissions result from deforestation and degradation of carbon-rich ecosystems like peatlands, according to data from the World Resources Institute. Most deforestation in Indonesia is driven by the forestry sector, including oil palm and timber plantation developers, who have strongly opposed past efforts to rein in forest destruction.

With funding from Norway in place, Indonesia is now set to pursue the aggressive emissions reduction target set last year by President Yudhoyono last year. Under the plan, Indonesia will cut emissions a minimum of 26 percent — and up to 41 percent — from projected levels by 2020.

CITATION: Sunanda Creagh. Indonesia to scrap permits to save forests-official. Reuters May 31

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