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Confusion in Indonesia over forestry licenses and conservation deal with Norway

Indonesia’s chief economic minister said on Wednesday that the government will not revoke existing forestry licenses to develop natural forests under a billion dollar conservation deal signed last week with Norway.

“We want to keep to our targets of 40 million tons of crude palm oil,” Chief Economic Minister Hatta Rajasa told Reuters. “We will not take away the existing licenses.”

Rajasa’s remark directly contradicts an earlier statement by Agus Purnomo, head of the secretariat of Indonesia’s National Climate Change Council, 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. Norway’s commitment led the Indonesian government to announce a two-year moratorium on development of natural forests and peatlands, starting in 2011.

But the moratorium — and proposed plan to revoke concession permits — caught the country’s forestry industry off-guard. Timber companies and palm oil producers have sought reassurance that they would be allowed to continue expansion. The area under oil palm cultivation in Indonesia expanded from 673,000 hectares in 1990 to more than 5 million in 2008 and the country expects to produce 21-23 million tons of palm oil this year, extending its lead as the world’s top producer.

Derom Bangun, Vice Chairman of the Indonesian Palm Oil Board, a palm oil marketing body, told Reuters that the moratorium would limit the granting of new concessions, but not restrict existing forestry permits.

“The government has assured us that the expansion of oil palm estates will continue within reasonable limits,” Bangun was quoted as saying.

The Indonesian government says that expansion could continue on some six million hectares of degraded and abandoned agricultural land across the country.

Prior to the announcement of the moratorium, developers had been eyeing forest lands in Jambi province of Sumatra, remote parts of Kalimantan, and Papua, the Indonesian controlled part of New Guinea, for new expansion.

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