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Permitting Crime: Palm oil expansion and illegal logging in Indonesia’s REDD pilot province

In May 2010, the Norwegian Embassy in Jakarta posted a list of frequently asked questions on its website about the US$1 billion REDD deal with Indonesia. The last question is about illegal logging: “Will this program stop illegal logging in Indonesia?”

It’s a good question. Here’s the answer that the Norwegians gave almost five years ago:

According to estimates, illegal logging costs Indonesia more than USD 2 billion a year in lost revenue, taxes and duties. One of the objectives of the program is to secure a more sustainable management of forest in Indonesia. The program aims to set up a set up a special unit to tackle the problem of illegal logging and enforce existing laws against illegal logging and trade in timber and related forest crimes.

Last month, the Environmental Investigation Agency published a report about how the expansion of oil palm plantations is driving illegal logging in Indonesia. Unfortunately, Norway’s promise of US$1 billion for REDD has (so far) failed to have an impact on illegal logging in Indonesia.

Permitting crime: Palm oil and illegal logging

EIA has been investigating illegal logging in Indonesia for more than 15 years. During this time, rates of illegal logging have come down by about half and the government has committed to reform. EIA’s latest report documents the shift from illegal logging associated with traditional logging concessions to illegality associated with the conversion of forests for palm oil.

EIA reports that,

Although the rule of law has increasingly been brought to bear on the old selective logging system, Indonesia’s plantation sector remains in abject chaos.

Based on two years of investigations into the palm oil sector in Indonesia, EIA’s report reveals the criminality driving forest conversion. The report states that,

The unprecedented growth of plantations has been characterised by illegality. Successive attempts to bring some semblance of order to land acquisition practices and deforestation have been undermined by a combination of corruption and incompetence, resulting in the exploitation of forest dwellers and driving rates of deforestation to the highest in the world.

The report focusses on Central Kalimantan and documents the history of illegal logging and deforestation in the province.

Detailed case studies in the report reveal:

  • outright violations of plantation licensing, timber and environmental regulations by firms clear-cutting forests in some of Indonesia’s richest tracts of rainforest;
  • clear links between a series of palm oil concessions, a corrupt regent and one of the highest-profile Indonesian political graft cases of recent years;
  • attempts by a palm oil firm to pay US$45,000 to police to bury an investigation into its illegal operations;
  • local governments selling-out customary communities and facilitating the transfer of millions of dollars of their resources to private firms.

The non-existent “paradigm shift” of REDD in Central Kalimantan

In December 2010, then-President Susilo Bambang Yudhoyono selected Central Kalimantan as the REDD pilot province, as part of Norway’s US$1 billion REDD deal. This helped create a “paradigm shift” and “helped to unpack layers of contextual considerations with regard to culture and governance”, at least according to the REDD+ Safeguards Working Group, a network of a large group of NGOs and Indigenous Peoples’ organisations.

There’s a province REDD+ Task Force, an Ad-hoc Multi-stakeholder Team, a Safeguards Information System, and REDD+ Social and Environmental Standards. All accompanied by the roar of chainsaws as the forests are converted to monoculture oil palm plantations.

REDD reality: “Forests are still wide open for conversion”

The problem of corruption and illegality in the forestry sector is recognised in Indonesia’s REDD programme. EIA notes that Indonesia’s REDD+ National Strategy emphasises the need to use administrative, civil and criminal laws to address “improper issuance of permits”.

In August 2014, the head of Indonesia’s REDD+ Agency, Heru Prasetyu announced an audit of 18 companies to check that their concessions were properly licensed. But he admitted that this was only addressing a small part of the problem. And he acknowledged that,

“The track record of Indonesia in terms of law enforcement is not good. The condition of our forests is not pretty.”

The reality is that REDD has failed miserably to address the ongoing destruction of Central Kalimantan’s forests. EIA’s report has this to say on REDD:

Reducing Emissions from Deforestation and Forest Degradation (REDD+) is an initiative that seeks to create financial incentives to stem greenhouse gas emissions from forest loss. It has been developed during negotiations to create a global, legally-binding agreement to tackle climate change.
The Government of Indonesia was an early mover under the scheme and in May 2010 signed a bilateral agreement with Norway, outlined in a Letter of Intent (LoI), under which Norway would provide up to US$1 billion to support reductions in deforestation.
A cornerstone of the LoI was a two year suspension, or moratorium, on new concessions for conversion of peatlands and natural forests, though Indonesia limited the latter to “primary” forest. During this period Indonesia was supposed to develop a database of “degraded” land and direct economic activity to these areas and away from forests. Under the LoI Kalteng [Central Kalimantan] was chosen as a REDD+ Pilot Province, in which reforms intended to reduce deforestation could be first implemented.
In September 2012 the MoF [Ministry of Forestry] approved a revised spatial plan that is now being used to govern forest and land use in Kalteng. That spatial plan, however still directs oil palm expansion towards some of the richest forests or peatlands left in the province. All of the case studies in this report, for example, are located on areas slated for conversion to agricultural use and are being cleared now.
A raft of policy developments, legal instruments and even a national Agency have been constructed under the umbrella of REDD+ in Indonesia. The reality is that forests are still wide open for conversion and spatial plans provide a legal basis for companies to destroy them for years to come.


PHOTO Credits: EIA.

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  1. Its not as though the money is going into a multitude of hands. Only a very few are benefiting and it should not be difficult to trace the money. The sad fact is that nobody who DOESN’T want money has any power or desire to act. Those that DO want money are having a great time chopping away. Indonesian and Malaysian forests are doomed and climate change exacerbated by the greed of a very few.

    If the international community want to stop this completely they ned to stop buying palm oil from Indonesia and Malaysia – full stop. Then, maybe, the respective governments of the two countries might get off their bloated backsides and do something serious.

    The only way to end deforestation is to remove the money that comes from it which puts the ball squarely back into our court. Pepsico don’t give a damn, Unilever don’t give a damn, Nestle don’t give a damn. no western governments (except Norway)give a damn. Oh well, game over.