MAC: Mines and Communities

Indonesia update

Published by MAC on 2008-03-18

Indonesia update

18th March 2008

Groups continue to denounce a recent regulation that would allow protected zones to be rented to mining companies for 200 dollars a hectare.

Indonesian forest law misjudges the climate

Daniel Murdiyarso, Bogor, The Jakarta Post

18th March 2008

"May you live in interesting times" is said to be an ancient Chinese proverb and subtle curse. Whatever its origins, there's no doubt these are interesting times for anyone engaged in environmental public policy-making. Especially when it involves Indonesia, forests and climate change.

The regulation (PP No. 2/2008) has caused a mild uproar among civil society and academia and earned the wrath of local governments. It's heartening to see such vigorous debate in a young democracy, especially when the demands to revoke the law are coming from the general public as well as experts who know the finer details.

Regulation No. 2/2008 was meant to determine non-tax government revenue for non-forestry activities on state forest lands. For example, open mining in "protection forests" and highway construction in "protection forests" were set to be taxed Rp 1.2 to Rp 3 million (US$120-$300) per hectare per annum.

The public outcry was inevitable. And it was no surprise to see the government quickly explain the regulation was not designed to target people going about their daily livelihoods, but rather the large-scale activities of 13 large mining companies operating in protection forests. However, in so doing, it also placed an onerous tax on essential infrastructure development by local governments, including highway building.

The law was launched only two months after the highly political discussions concerning forests at the UN Climate Change Conference in Bali. Delegates from more than 180 countries agreed at the convention that emissions reductions from deforestation and forest degradation were among the most cost-effective measures for mitigating climate change.

The upshot is delegates at the convention agreed payments to developing countries to reduce emissions from deforestation and forest degradation (REDD) should be part of any future revision to the Kyoto Protocol. Given forest loss and degradation account for 20 percent of global carbon emissions, environmental policy decisions that affect forests are going to attract more not less attention, as we are seeing so vividly right now.

Developing countries that harbor tropical forests, like Indonesia, could possibly implement, and financially benefit from, REDD schemes, provided they can demonstrate accountability and legitimacy.

Accountability is little more than a technical issue, relating to the ability of host countries to collect and monitor quality data. Legitimacy, on the other hand, is in no way a technical trifle. Legitimacy in this case is all about political will: the courage and preparedness of a government to avoid further deforestation.

The general public, practitioners and investors are on a steep learning curve as they grapple with the nitty-gritty details of REDD and its expected introduction once the current Kyoto Protocol expires in 2012. Before the Bali convention, many people in Indonesia believed they would get through the next five years on autopilot. But such tranquil notions have been completely rocked by the disputed regulation.

The new regulation sends the wrong message to the public. Their trust is eroded. As for potential investors, the law has created even more uncertainties, making REDD in Indonesia less attractive. REDD is about incentives to preserve, while Regulation No. 2/2008 is about permits to destroy.

The new regulation's terms covering infrastructure development, among others, provide loopholes that are an open invitation to violate the law.

Indonesia's international friends, including its fellow 11 Rainforest Coalition countries, may be confused by the decision. But of course, revoking the regulation, as demanded within Indonesia, could be politically embarrassing and leave unresolved the original aim of tackling issues surrounding mining companies on protected lands.

Nevertheless, something must be done.

Charging forest rent of not more than $300/ha/annum (Rp 3 million) as stipulated in the regulation is roughly equivalent to $1 per ton of carbon at the most. This is comparable to the certified emission reduction market price of the clean development mechanism but could potentially create perverse incentives, as environmental services are free. Such a policy would harm the rural poor and forest-dependent communities whose livelihoods rely to varying degrees on these free services.

One way of dealing with such negative impacts would be to charge large companies more for the environmental services they use. However, given Indonesia is not renowned for its transparency, there is no guarantee additional charges will be used properly and go to the poor forest dwellers unless civil society is involved. No matter the cost, public trust needs to be restored.

If designed well, the socioeconomic benefits of REDD are beyond carbon and can be exponentially huge. This can be arranged to create close links with the poor rural livelihoods strongly reliant on free access to forest goods and services. To commit to this now gives Indonesia five years for a pilot scheme, during which time the activities would have to be subject to public scrutiny.

For Indonesia, hosting the recent UN Climate Conference has had a tremendous impact in terms of public awareness. Such huge social capital should not be wasted. The public's eyes are now wide open to any public policy that could potentially erode their interests.

The momentum gained from Bali should be used to guide the development and implementation of REDD, which is still in its infancy. No solution is perfect unless every stakeholder has room to participate and it is in their interest to improve it rather than to destroy it. Remember, 2012 is not that far away, and the times between now and then are sure to be interesting.

The writer is senior scientist at the Center for International Forestry Research (CIFOR), Bogor

Indonesia Liquidates Its Forests For a Few Dollars

Mathias Hariyadi, AsiaNews

12th March 2008

Groups for the defence of the environment denounce the falsity of Jakarta's commitment to combating deforestation. A recent presidential decree grants protected zones to mining companies for 200 dollars a hectare. Each year, the country loses 1.8 million hectares of forest.

The international commitment of Indonesia - repeated just recently in December, at the climate conference in Bali - to contain deforestation and reduce carbon emissions is not being translated into concrete actions. On the contrary: the government is liquidating the patrimony of the archipelago's forests to mining companies for a few rupiah. The denunciation comes from a few groups for the protection of the environment. They accuse the recent presidential decree 2/2008, by which Jakarta concedes the exploitation of the forest areas for a ridiculous rental payment of about 200-265 dollars per hectare.

According to the Mining Advocacy Community Network (Jatam), the Yudhoyono administration forgets that, between 2000 and 2005, the rate of deforestation in Indonesia was the highest in the world. 145 million hectares of Indonesian forest area were quickly cleared. According to a non-governmental report, every day 51 square kilometres of forest are destroyed, for a total of 1.8 million hectares each year. The role of the forests is fundamental for the absorption of carbon. But their destruction provokes a release of carbon that significantly increases emissions of carbon dioxide, the main cause of global warming.

The controversial decree concerns the 13 large mining companies that since 2004 have obtained permission to operate in the forest areas. It is calculated that their activities - concentrated in areas like Sumatra, Papua New Guinea, the Maluku Islands, and Borneo - release between 125 and 251 million tons of carbon dioxide into the environment. The provisions also extend to energy resource companies. Indonesia is rich in coal, nickel, gold, tin, and copper, and the country intends to provide incentives for investment in the sector. Strong demand for these basic materials in India and China has helped cause a spike in their prices.

Indonesian Forest For Sale: How Low Can We Go?

Stevie Emilia, The Jakarta Post

11th March 2008

Well-crafted words fail to hide the true meaning behind the government's latest action that might soon allow more mining companies to operate within protected forest areas in return for cash compensation: our forests are for sale.

As if the idea is not bad enough, the "sale" price is going to be set very low, up to Rp 3 million (US$326) a year per hectare.

Currently, there are 13 mining companies that operate in protected forests. This special treatment is legitimized by a 2004 government regulation, despite that the companies' operations are against a forestry regulation that completely bans all mining activities in protected forests.

Protected forests are supposed to be free of all commercial exploitation and exploration activities. However, at this pressing time, the government insists the 13 companies are allowed to continue operations, because they started operations in the forests before the regulation was introduced.

However, the passing of a new decree, announced Feb. 29 by Energy and Mineral Resources minister Purnomo Yusgiantoro, will surely cause the country's forests to bleed to death. A new presidential decree might soon be introduced allowing other mining companies to apply for similar treatment in return for cash.

The move clearly shows two things; first, the government's poor coordination and second, a lack of good will needed to protect the country's forests.

For one thing, the decree will make the National Rehabilitation Movement (Gerhan) project, launched in 2003 to restore 5 million hectares of forest by 2009, pointless.

The massive reforestation program was aimed at rehabilitating forests damaged by decades of deforestation, illegal mining and forest fires.

Deforestation in Indonesia -- claimed to be the world's worst with an area the size of Switzerland being lost every year -- has already lead to the damage of some 59 million hectares of forest out of the country's 120.35 million hectares.

If the decree is issued, allowing more commercial activities to take over what remains of our pristine forest, home to rich biodiversity, including many near-extinct species, it will mark a huge setback of our reforestation program.

For ordinary people, it seems that each related ministry -- the Forestry Ministry, the Environment Ministry and the Energy and Mineral Resources Ministry -- have their own set of agendas and programs and are unwilling to work together for the sake of the people and the future.

It seems like President Susilo Bambang Yudhoyono has lost the will to deal with his own aides. He lets them do as they please, unaware that his ministers' wrongdoings will eventually make him suffer the consequences.

This critical year before the presidential election presents a prime time for Yudhoyono to start seriously embracing green issues in his bid to gain more popularity. He should take example from other world leaders, many of whom have embraced environmental issues in their campaigns to gain attention and to win hearts.

Even top celebrities have learned to educate about environmental issues and lend support to green campaigns.

Former U.S. vice president Al Gore might not have been elected as president but his efforts to raise awareness of climate change threats have made him popular across the world and have even earned him a shared Nobel Prize with an UN body also working on the issue, the UNFCCC.

If Al Gore's lectures and his success story fails to charm Yudhoyono, he can at least recall the sufferings experienced by thousands of mudflow victims in Sidoarjo, East Java.

Many innocent residents have lost their homes and livelihoods due to the catastrophe that started out when hot mud started gushing out of a gas exploration site, and the mud continues to flow to this very day.

Or perhaps he can look at how bad our management of the environment has been, allowing constant suffering from floods during the rainy season and drought during the dry season.

It is undeniable that, as a developing country home to millions of poor people, we are in desperate need of cash for the sake of development and a better economy, but here are many other ways to raise cash without having to touch the pristine protected forests.

A government promise to conduct a "selection" process inside protected forests before any approval of commercial activities might not help smother the environment alarm.

The promise to conduct studies before granting new permits for the mining companies might have made the regulation sound more "serious", allowing us to believe that the government "will not compromise" on the country's protected forests and environment, but the problem is people have lost their faith in such promises.

The true meaning of the word "study" is not lost on the public. For members of the House of Representatives, "study" may imply an opportunity for travel. For investors, the words "study" and "selection process" might suggest the need to bribe their way in the face of complicated bureaucracy procedures, while for ordinary people those words might simply translate as "nothing will get in our way".

Besides, it is no secret that many of the projects requiring studies such as the investigation of environmental impact analysis, could start regardless of their outcome. Questions are likely to be raised only when such projects fail, suffer damages or, even worse, claim lives.

The latest survey, jointly conducted by the Indonesia Center for Environment Law and the State Ministry for the Environment, brought to public attention on March 2, confirmed these fears.

The survey found that the government and private firms both continued to block public access to information about environment problems. It also cited that many private companies failed to fully accommodate for public interest during the processing of the pre-development environmental impact analysis.

Another concern is the number of reports that place the country among the most corrupt in the world while, every day, we are entertained by news showing public officials stashing huge amounts of money for their own interests.

Under the present situation, with poor coordination among ministries and a lack of commitment to protect the country's environment, how can we trust the government with the fate of our protected forests?

Millions of Indonesians still rely on the forests for their livelihoods and survival.

Even renowned guitarist and Grammy winner Carlos Santana has raised doubt over the government's sincerity in protecting the forests with his refusal to perform here for a jazz festival. He simply stated that our countrymen loved to cut down trees.

We might be poor and not have much money, but do we have to sell our souls and our dignity?

The author is a staff writer at The Jakarta Post.


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