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Palm oil facilitates large-scale illegal logging in Indonesia

New oil palm plantation established on peatland outside Palangkaraya
New oil palm plantation established on peatland outside Palangkaraya in Indonesia’s Central Kalimantan Province on the island of Borneo. Photos by Rhett A. Butler

Development of oil palm plantations is providing cover for large-scale illegal logging in Indonesian Borneo, driving destruction of some of the island’s most biodiverse forests and undermining efforts to reform the country’s forestry sector, alleges a new report published by the Environmental Investigation Agency (EIA).

The report, titled Permitting Crime: How palm oil expansion drives illegal logging in Indonesia, includes several case studies showing links between illegal practices and local officials, illustrating continued problems with corruption and resource capture by well-connected businessmen. Forests and local communities lose out.

The report says that oil palm plantations provide a major loophole for evading the country’s new protocol — the Timber Legality Verification System (Sistem Verifikasi Legalitas Kayu, or SVLK) — aimed at improving forest management and rooting out illegal logging. As originally drafted, SVLK applied to timber concessions, not areas zoned for clearance for industrial plantations.

“Conversion timber has to date been almost entirely ignored by the SVLK,” states the report. “By 2010, land conversion accounted for 75 per cent of timber production from natural forests… and is associated with an illegality rate of 80 per cent.”

“As conversion increasingly replaces the traditional forestry model as a source of timber, it is driving up illegal logging to previous highs and threatens to undermine progressive reforms.”

Peat forest drainage and clearance for oil palm in Central Kalimantan.

EIA identifies small and medium sawmills as one of the key gaps in cleaning up timber production. Indonesia’s Ministry of Forestry has traditionally only collected data from large mills, pushing illegal timber to the smaller processors.

The timber is often sourced from new oil palm concessions, which according to the report are often cleared without Timber Utilization Permits (IPKs). As a result, timber volume officially recorded is far below what is actually being taken out of Indonesian forests — perhaps undercounting by 80-fold.

To address timber flowing out of areas zoned for conversion, EIA recommends the Indonesian government extend SVLK implementation to the plantation sector and step up monitoring. It also calls for audits of all IPK licenses and the creation of a task force to investigate and prosecute corruption in permit allocation.

“The Ministry of Environment & Forests needs to immediately force mandatory legality audits of all logging in palm plantations and revoke permits where firms resist them,” said EIA Senior Forest Campaigner Jago Wadley in a statement. “Similarly, it must ensure land clearance ceases in all concessions found non-compliant with the 2014 SVLK legality standard, seize related timber and initiate legal proceedings.”

Forest clearing in Central Kalimantan for oil palm.

But these measures are just starting points, says EIA, which went on to urge the government to address the issue that underpins forest destruction in Indonesia: the continued handing out of natural forests for conversion to plantations. EIA says that until that practice is addressed, it will be extremely difficult to stop deforestation at a national scale, even when leading companies are committing to zero deforestation policies.

“While these commitments are
laudable, as long as the government
is making forests available for
conversion there will be companies
willing to clear them,” states the report.
“Companies like those included in
this report display limited concern
for legal procedure or environmental
damage, a disregard for the rights of
rural communities and may be
collectively responsible for the
destruction of hundreds-of-thousands
of hectares of forest.”

“The willingness of such companies to
step in when larger firms decline to
develop sensitive areas has been
well documented,” it continued. “Aspiring ‘zero-deforestation’
companies now report these
realities fundamentally threaten
their ability to meaningfully protect
their forests.”

“Ultimately, forest friendly downstream
sourcing policies and commitments by
the largest growers must be built into
Indonesian law in ways that spread
these progressive ideas across the palm
oil industry. Until then, neither these
voluntary measures nor REDD+ will
stop the flow of timber from Indonesia’s
plantation sector.”

CITATION: EIA International. Permitting Crime: How palm oil expansion drives illegal logging in Indonesia. Dec 2014.

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