Businesses Warm to Indonesia’s Moratorium on Forest Clearing

Voice of America
October 22, 2010

by Sara Schonhardt

The Indonesian government is imposing a moratorium on forest
clearing in return for $1 billion grant from Norway to fund
projects to curtail deforestation and land degradation.
Environmental groups and some businesses welcome the freeze.

Starting in January, Indonesia will bar companies from clearing
native forest and peat lands for two years. Timber, pulp and
paper operations, and palm oil plantations will be banned from
expanding onto new concessions.

The decision initially raised concerns that it would set off a
rush of land acquisitions or hurt the economy.

But now many business people and environmentalists say timber
industries can still develop land for which they already hold
licenses, and they will be able to expand into areas that have
been degraded by erosion or previous uses.

The timber and palm oil industries contribute to the destruction
of around two-million hectares of Indonesian forest each year,
the leading cause of the country’s greenhouse gas emissions.

Environmental groups consider the freeze an opportunity for
businesses to improve their forest management.

Bustar Maitar works with Greenpeace:

“This moratorium also is the opportunity for the industry to
improve the productivity of their plantations,” said Bustar
Maitar. “The yield of production of Indonesian plantations is
very low compared with Malaysian plantations.”

Although Indonesia produces more palm oil than neighboring
Malaysia, it yields less per hectare. If companies become more
efficient, Maitar says they could expand production without
destroying the forest.

Some environmental groups, however, say stopping plantations
from expanding is unrealistic. They say it is more important to
set out clear regulations on forest ownership and land planning.

The government says around 40 million hectares of degraded land
could be used for palm plantations, but it has not decided on a
formal definition of what degraded land is or where it is

Indonesia pledged to reduce its carbon emissions by 26 percent
by 2020. Much of that reduction can come from protecting its
forests and peat land. They lock in carbon, but release it when
they are used for planting.

Greenhouse gas emissions are thought to contribute to global
warming. Countries around the world are debating how best to
reduce emissions without stalling economic growth.

Aida Greenbury manages sustainability programs at Asia Pulp and
Paper, one of the region’s largest paper companies. She says
government and business must work together to save Indonesia’s

“No one company can single-handedly address the issues of
protection of rainforest and climate change,” said Aida
Greenbury. “We are simply not large enough and we do not have
influence over enough land.”

Greenbury says her company sets aside 40 percent of its 2.5
million hectares for conservation and that it has invested in
protecting tiger and orangutan habitats.

She says poverty is the leading cause of deforestation, and that
by providing jobs, plantations help reduce illegal logging.

Forestry and its related industries account for about 5.5
percent of Indonesia’s $515-billion economy.

Sinar Mas is Asia Pulp and Paper’s parent company. Greenpeace
accuses the group of clearing virgin forest and peat land and
has pressured Nestle, Unilever and Burger King to sever palm oil
contracts with the agribusiness giant.

Maitar says Greenpeace wants the government to weigh the costs
to the environment against the economic benefits of the timber

“For us Sinar Mas is the example,” said Maitar. “Of course it is
not only Sinar Mas. We know there are many other companies also
doing the same thing. What we want to show to the government is
that this is a type of iceberg.”

Forest protection groups say the moratorium gives the government
time to clarify regulations on forest development. At the same
time, the government can determine guidelines for projects that
can earn money from REDD, a global program that allows
industrialized nations to pay developing ones to reduce their
emissions from deforestation and land degradation.

Greenbury says the moratorium is a welcome breather in an
industry that has moved very fast for 30 years.

“I think it is really good to have a break,” she said. “From 80
[1980] until 2010, we have been under enormous criticism from
all over the world. So let us just stop everything, tell us
where did we do wrong and let us analyze it, see where we can
improve according to national regulations and then come up with
a new set of regulations or system.”

Indonesia is the world’s third-largest greenhouse gas emitter.
The international community has lauded its commitment to
reducing emissions from forestry, but enforcement is a major
problem since the country’s massive forests are difficult to

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