Ecological Disaster

Rully Syumanda
Jakarta 10 April 2007


By definition, a disaster is a situation in which the community’s normal way of life fails as a consequence of extraordinarily adverse events, either natural or human-made.

Indonesia is a country that is susceptible and sensitive to disasters, both those occurring naturally and those that eventuate as a result of human activity. In the past seven years (2000-2006), there have been 392 incidents of flooding and landslides throughout Indonesia, excluding Papua, Jakarta and other capital cities. These have resulted in 2,393 victims, severe damage to more than 188,000 homes, and severe damage to about half a million hectares of land, to the extent that it is no longer usable.

The disasters have incurred total direct losses of 36 trillion Rupiah (approx US$4 billion) and indirect losses of 144 trillion Rupiah (approx US$16 billion). These figures are equivalent to 28 percent of the 2007 National Budget.

Kartodihardjo and Jhamtani describe this as a development disaster, defined as the combination of environmental crisis due to development as well as the foibles of nature herself, which are exacerbated by the destruction of natural resources and the environment, and the injustice of social development policy. Disasters such as floods, droughts and landslides are often perceived as natural disasters that are simply due to fate. In fact, these phenomena are more often caused by the cumulative and ongoing mismanagement of the environment and natural assets.

In coastal Java, from 1996 to 1999, at least 1,289 villages were affected by flooding. This number increased almost threefold (2,823 villages) by the end of 2003, an implication of the extensive damage to the coastal ecosystem due to land conversion, destructive fishing, reclamation and marine pollution (80% of industry in Java is located along the northern coast of Java).

As well as floods, droughts are also occurring with increasing frequency in Indonesia. Lately, the Indonesian dry season has become longer and more unpredictable, even considering that Indonesia is naturally located on the geographic trajectory of the El Nino-Southern Oscillation (ENSO). For example, although the 2003 dry season was classed as normal, there were 78 incidents of drought recorded in 11 provinces, with West and Central Java the worst affected. The main impacts of the droughts were reduction in the availability of water in both the reservoirs and river courses, with most severe impacts in Java. Subsequently, the security of clean water, food production and electricity were also affected.

Drought is also connected with forest fires, because dry weather triggers expansion of forest and land fires as well as the spread of smoke.

These disasters not only affected human lives and property, but also disrupted agricultural production, polluted water resources, and caused more extensive social problems, such as refugees and migration. Although the frequency of disasters has increased significantly in the past few years, the government has not conducted a thorough study of their patterns and causes.

There is a significant threat to the three basic necessities for sustainable life, namely water, food and energy. Regarding water, the biggest threat comes from significant escalation in the demand for potable water and the increasing limitation of its availability. This is caused by decline in water quality (due to pollution, intrusion and destruction of water sources) and water quantity (due to privatization, commoditization of water and inefficient distribution). In Jakarta, for instance, less than half of its citizens are serviced by the Drinking Water Company (PAM) network. Consequently, the majority of people extract ground water (using wells or pumps) and also buy packaged drinking water or water from itinerant traders. Meanwhile, some 70 percent of groundwater in Jakarta shows indications of being unsuitable for drinking. Water has transformed from a basic need to a commodity.

A similar situation applies to food. The loss of community sovereignty over food has ended in cases of starvation and malnutrition. In East Nusa Tenggara in 2003, more than 13,000 infants suffered from malnutrition, and as many as 36 died. The quality of Indonesia’s human resources is ranked 111 out of 177 countries (UNDP, 2004).

Indonesia’s seas are extensive and are certainly capable of becoming the largest contributor to world fisheries, with ocean fisheries yielding 3.6 million tonnes in 1997 (Burke, et al., 2002). Ironically, on a national level, fish consumption is only about 19 kg/capita/year, which is lower than Vietnam and even Malaysia, where the level of consumption reaches 33 kg/capita/year. Fishers are the most impoverished community group in Indonesia and are becoming increasingly marginalized over time.

The green revolution has eradicated 75% of 12,000 local paddy rice varieties and spawned a new dependence on chemical fertilizers and pesticides supplied by foreign companies. Local biodiversity and food security has been ruined. Our country has been an absolute rice importer since the mid ‘90s.

Liberalization of trade has altered the function of food from being multidimensional to being merely a trade commodity. Even the WTO defines food security as the “availability of food in the market”. In practice this concept forces people in developing countries to fulfill the food needs of developed countries through the free market mechanism, which has resulted in catastrophe in some places.

Energy sovereignty is also on the line. Transnational corporations (TNCs) have extracted 75% of our oil reserves to date. 58% of natural gas production and 70% of coal is exported each year. Meanwhile 90% of the of the Indonesian people has become dependent on refined fuel oil and 45% of households lack access to electricity. There has never been a real strategy for reducing dependence on refined fuel oil. Rather, there has been a push for continued consumption in order to benefit a handful of people.

At the same time, the choice of cheap, easily accessed and clean energy has become very scarce. The country is so submissive to the dictates of the free market, and people have become so dependent, that they are forced to buy energy at world market prices. Increase in the price of refined fuel oil, according to some research, has increased poverty by 11%. The total population of poor in Indonesia rose to 41% after escalation in fuel prices.

Increase in the prices of consumables, low purchasing power, and unavailability of jobs has not only increased the population of poor people. Much media coverage also reports a shift in the pattern of consumption, especially as regards women and children. People have been forced to reduce their nutritional intake in order to buy kerosene. Then, shrinkage of the job market combined with increase in the price of consumables has served to encourage people to participate in damaging the environment, for the sake of something to eat.

The widespread involvement of people in illegal mining that is destructive to the environment in South Kalimantan, West Java, North Sulawesi, East Kalimantan and Papua are implications of the country’s failure to safeguard its people’s livelihoods.

In view of the above phenomena, ecological destruction and climate patterns are important issues that must be addressed. Regarding the water crisis, for instance, an imminent crisis is predicted for Java-Bali. However, this phenomenon has not served as a lesson in other areas, like Sumatra, Kalimantan and Sulawesi, where water crises are occurring with increasing regularity. In the dry season we are always short of water, and in the wet season we are struck by floods. All of the infrastructure set up to manipulate the environment has failed, because the source of the problem has not been properly addressed. Crisis after crisis as a result of this mismanagement will eventually lead to increasingly apparent ecological disasters.

The ecological disasters themselves are the accumulation of ecological crises caused by the injustice and failure of the natural resource management system, which has led to the collapse of community livelihoods. Indonesia’s sustainability is currently at a critical point because ecological disasters are occurring cumulatively and simultaneously in various locations, without any significant attempt to reduce the susceptibility or sensitivity of the community to the impacts of ecological disasters.

Main Signs of Ecological Disaster

In general, ecological disaster is marked by several symptoms or signs that can be seen and felt in daily life, such as:

1. Lack of choices for sustaining life.
2. Failure of ecosystem function.
3. Deterioration in the quality of life, through marginalization and impoverishment.
4. At its extreme, eventual death.

Ecological Disasters in the Forestry Sector

In the forestry sector, ecological disasters affect all aspects of human life, especially for those living near to natural forest resources.

All signs and prerequisites of ecological disaster can be found in the forestry sector.

For example, the community living along the Siak River in Riau Province derives its livelihood from fishing. Almost all clothing, food and shelter needs are fulfilled and supported by proceeds from the river. Moreover, the Palace of the Siak Kingdom and the Agung Mosque is located on the edge of this river. The relationship between the river and the community is very strong. Dozens of homes are arrayed along the river and face it.

In the 1980s, the emergence of industries in Riau drove subsequent development of national-scale factories along the Siak River. More than 70 processing industries (oil palm, oil, wood, chemical-thinner, pulp and paper, and other processing industries) were erected and their waste disposed of in the Siak River. Industrial development and construction of roads to distribute their products encouraged the community living along the Siak River to change the direction of their houses so that they faced away from the river instead of towards it. The new orientation of houses altered the community’s culture of waste management. Previously, waste was collected and discarded at a single site away from the river. The new orientation encouraged people to throw their waste directly into the Siak River.

Uncontrolled waste disposal from various factories and the ineffectiveness of law enforcement led to pollution on an almost unimaginable scale. Physically, the river stank and there were often fish deaths. The community tried to find fish either further downstream or upstream during low tide. When it became unviable to cover the distance with fish traps and the fish catch had declined immensely, the fishing community tried farming along the river’s edge as an alternative livelihood.

Later on, some of the processing industries needed more land to ensure their supply of raw materials. Consideration of distance was of course a good reason for subsequent development concessions to be located along the river flow area. The government and companies did not provide satisfactory compensation for the community, who were left in a restricted position.

From the prosperous community group of the previous Siak Kingdom era, the Siak community was now at a point of extreme impoverishment. Skin diseases/irritation/parasites developed easily. The community had no way of improving their welfare. They could choose to work as laborers, but with the level of education and capability they had it was not possible to obtain an adequate income. Some members of the community chose to work as unskilled laborers in other countries. The remainder chose to persist at a low level of welfare, in which access to health and clean water were far from sufficient and restricted their access to education.

Development along the Siak River ultimately led to an environmental crisis, combined with destruction of natural resources and injustice in social development policy. The Siak community presents a clear portrait of ecological disaster. The Siak community lack choices for sustaining life. Failure of ecosystem functions means community life is no longer supported. Quality of welfare has declined dramatically, as has health and education.

Destructive Logging and Deforestation

The deforestation problem in Indonesia is spreading. Illegal and destructive logging is a major cause. In addition, conversion of forest areas for the development of oil palm and the pulp and paper industry has been substantial. Since the beginning of this decade, as much as 2.8 million ha of Indonesia’s forests have been lost each year to illegal and destructive logging. This has led to US $4 billion or 40 trillion rupiah in losses to the State per year.

If we put two and two together, forest conversion and the pulp and paper industry are also causal factors in the rising rate of deforestation. We know that some 15.9 million ha of natural tropical forest has been cleared for forest conversion. The conversion of forests for oil palm development is a contributing factor to the increase in deforestation in Indonesia. From being prime land, 15.9 million ha of natural tropical forests have been cleared. On the contrary, there has been no meaningful increase in planted land area. Plantation area has only increased to 5.5 million ha in 2004, from 3.17 million ha in 2000. More than 10 million ha of forest have been abandoned after the ‘harvest’ of the wood crop growing there.

Similarly, the pulp and paper industry have also brought problems. This industry needs at least 27 million cubic meters of timber each year (Department of Forestry, 2006). Since plantation forests can only supply 30 percent of the total demand for pulp, this industry continues logging activities in natural forests, harvesting some 21.8 million cubic meters in order to fulfill its annual requirement. The timber obtained from natural forests is owned by company affiliates or taken from the concessions of its partners. This is not mentioning plywood or other trades, for which only 25% of timber requirements are supplied by plantation forests.

The negative impacts of forestry crime in Indonesia are described above. Economic losses from forestry crimes such as illegal logging, conversion of natural forests, and so on, are calculated to reach 200 trillion Rupiah. This loss does not include ecological disasters caused by illegal logging activities, such as floods and landslides, which now occur frequently in all corners of the Archipelago.

WALHI deduces that the ecological degradation caused by forestry crimes is caused, at least, by two major factors: (1) differences in the outlooks and value systems upheld by the community, the forestry department, and the government (both local and central); and (2) erosion of the judicial process due to corruption, collusion and nepotism. At this point, enforcement of the law is inconsistent.

Inconsistency in the judicial process is caused by the viruses of corruption, collusion and nepotism, which intricately bind the immediate interests of law enforcers (and even bureaucratic officers) throughout the judicial process, starting with the police, attorneys and the judiciary. The result is that anti-illegal logging operations in Papua Province (March 2005) failed to catch top-rung criminals or their protectors in the police force and military. From this operation, 186 suspects were arrested. But, until January 2007, only 13 suspects had been successfully prosecuted and not one syndicate leader has been caught. From the 18 major cases that have reached court, all accused have been released.

Furthermore, differences in the outlooks and value systems upheld by the community, the forestry department and the government (both local and central) have been a major factor in the increasing rate of forestry crime. From the community’s perspective, forests function to protect people from high winds, drought and erosion. The forestry department also recognises the ecological functions of the forests; however, illegal clearing and logging are allowed to continue in accordance with the economic calculations maintained by the forestry department. Similarly, the government’s stance also draws from economic aspects of forests rather than its ecological functions. For them, the forests are a resource with abundant natural resource wealth that must be extracted for the national income. Unfortunately, the development policies that are implemented do not favour forest sustainability.

As we track the rate of forestry crime (illegal logging, conversion of forests without replanting, the unlimited thirst of the pulp and paper industry for wood), it is clear that the government needs to halt several forms of forestry crime that have the potential to trigger a series of ecological disasters, such as floods, landslides, and drought. In addition, community involvement (especially the traditional community) in securing forest conservation is highly necessary. Moreover, the seriousness of all law enforcers (starting with the police force, attorney, to the judge) is crucial to stopping deforestation associated with forestry crimes. Without the serious involvement of all parties in carrying out surveillance, it is quite possible that Indonesia’s forests will be completely cleared in the not-too-distant future.

Finally, deforestation as a consequence of illegal logging is caused, at least, by three major factors, that is, the lack of acknowledgement by the government of people’s rights to manage their forest resources, widespread corruption in various sectors of forest resource management, and the large gap between supply and demand. If these three factors are not immediately overcome – make no mistake – Indonesia’s forests will be rapidly cleared within a short timeframe.

The Kontu Case, like a Fire in Chaff

The Muna conflict began in January 2003. This land conflict, involving the Kontu-Muna traditional community and the Muna Regency Government, has found neither legal nor political resolution.

This case began with plans for expanding the city zone around Kontu. Implementation entailed the Muna Regent (La Ode Saafi Amane in the 1980s) settling about 50 households in Kontu. This no doubt gave rise to social envy among the community located in Labaha and Bangkali villages in Wali distrcit, who saw the area as their ancestral land. Throughout its development, this case has revolved around the conflicting claims of the Kontu community and the Muna Regency Government for the Kontu, Patu-patu, Lasukara and Wawesa regions.

On the one hand, the Kontu community is convinced that Kontu, Patu-patu, Lasukara and Wawesa regions are their communal ancestral land, which they have a right to inherit and manage according to ecological wisdom that has been passed down through generations. On the other hand, the Muna Regency Government considers the region to be protected forest in accordance with Law No. 41/1999.

This tug-of-war reached a climax when the Muna Regency Government attempted to forcibly evict the Kontu community. The Muna Regency Government not only forced them to move, but also burnt the homes and gardens of the Kontu community, and used violence causing permanent disabilities, and physical and psychological wounds to the Kontu community.

SWAMI, a member organisation of WALHI Southeast Sulawesi that carries out advocacy for the traditional communities of Kontu, Patu-patu and Lasukara, observed the conflict and report several facts and scenarios about the targets of the Muna Regency Government and how eviction of the traditional community in the Kontu forest region was carried out. This report also aims to explain (regional and central) government claims, which are always purportedly in the interests of ‘conservation’ and saving the environment.

First, the protected forest claimed by the Muna Regency Government is based on the Minister for Forestry Decree No. 454/1999. However, this document does not affirm in detail that the Kontu, Patu-patu and Lasukara regions are included in the claim. Moreover, the provision was made centrally without any community participation, to the extent that the determination of boundaries was not approved by the relevant agencies, namely the Agency for Land Affairs and the Governor of Southeast Sulawesi.

Second, the Muna Regency Government mismanaged the protected forest zone. This is evident from forest zoning policies delinating Jompi and Warangga as locations for Public Cemetary and Waste Disposal Sites. This is a digression from Law No. 41/1999 on Forestry.

Third, Kontu, Patu-patu, Lasukara, Wawesa and surrounding areas are in the Watoputeh community communal region. Historically, this region was owned collectively by the Katobu, Lawa, Kabawo and Tongkuno communities. The area is therefore actually the traditional land of these four communities, who have the right to manage it. However in the process of determining boundaries, the status of this region as being traditionally owned by these communities was not heeded and there is now overlapping ownership.

Fourth, although the Muna Regency Government previously employed the excuse that the Kontu region and its surrounds was a protected forest, the reason now used for evicting residents is that it is a green channel according to Regional Regulation No. 9/1997 on City Planning.

In view of these four facts, WALHI Southeast Sulawesi makes the following four recommendations:

First, the Minister for Forestry immediately re-evaluate Ministerial Decree No. 454/kpts-II/1999 dated 17 June 1999 on the Determination of Forest and Water Zones in Southeast Sulawesi Province, because this decree is used by the Muna Regency Government as an excuse to evict traditional communities and farmers in the Kontu region. It is a major trigger for agrarian conflict in Southeast Sulawesi, and pits traditional communities against regional governments. This has occurred in a number of regions including the Rawa Aopa Watumohai National Park region, where it gave rise to a dispute involving the traditional community whose livelihoods depend on marine resources, which have been subdivided by the National Park; the Raya Murhum Forest Park conflict, which has pitted the government against the community residing around the Tahura zone; and other conflicts that remind us just how many of our traditional communities live around forest areas that the government have unilaterally designated as national parks, protected forests or community forest parks.

Second, immediately re-structure existing land and forest zones according to the communities around Muna Regency, using a community forest system model.

Third, immediately stop evictions and other acts of violence that violate human rights.

Fourth, the National Human Rights Commission to immediately take preventative action to stop conflicts occurring in Kontu, Muna Regency, to protect the human rights of the Kontu community, and pursue these so that decisions affecting the relevant parties are legally binding.

In its attempts to resolve the Kontu case, WALHI Southeast Sulawesi together with the Kontu community as represented by the Kontu People’s Organisation has had dialogue with various parties, covering political, legal, social, cultural and economic issues. Regarding the political aspects, the Kontu community accompanied by Arif Rachman, the executive director of WALHI Southeast Sulawesi, met with Commission IV of the Republic of Indonesia People’s Representative Council. At this meeting, Ganjar Pranowo (member of Commission IV of the Republic of Indonesia People’s Representative Council) requested that the community accompanied by WALHI make a road map for resolution of the Kontu case as it has unfolded and pursue this with the Department of Forestry. Moreover, the PDIP fraction of the Republic of Indonesia People’s Representative Council has issued a letter of appeal to the Department of Forestry to resolve the Kontu case peacefully and justly.

The Kontu community also approached the National Police Headquarters to report the conditions that they had so far experienced. The Kontu People’s Organisation even had dialogue with the Department of Forestry as represented by the Secretariat-General for Forestry and several competent staff who subsequently issued a recommendation for the formation of a team who would carry out a study to re-assess the status of the Kontu forest zone, as material for resolution of conflicts in the region using a persuasive dialog and just approach. Moreover, the Kontu People’s Organisation (headed by Aisyah), as a vehicle for the Kontu community and accompanied by WALHI Southeast Sulawesi, also held a meeting with Mr. Anang Yuwono (Southeast Sulawesi Regional Police Head), Adjunct Police High Commissioner (AKBP) Yudar L Lullulambi (Muna County Police Head), Mr. Paraminsi Rahman (expert staff, Muna Regional Forestry Service) and Mr. La Ode Sadikun (acting head, Southeast Sulawesi Provincial Forestry Service) at the Fajar Restaurant (31 May 2007). In this meeting, it was stated that the Regional Police Head did not have the authority to resolve this case outside of criminal and civil suits. Apparently, the issue fell within the jurisdiction of the Department of Forestry. In response to the Regional Police Head’s reply, the two representatives from Muna County Forestry Service and Southeast Sulawesi Provincial Forestry Service were unable to give a satisfactory reply regarding resolution of the Kontu case.

In fact, the Kontu community’s conflict with the Muna Regency Government is not that complex, if the government had good intent for resolution of the problem and invited community participation in forest zone management. This is because the existence of the community around the forest actually improves the security for forest sustainability, as local communities have an interest in protecting the function of the forests that they manage because this is the land that gives them life. The complexity of conflict resolution is linked to political issues, as is evident from the statement made by the Muna Regent in the Southeast Sulawesi local daily newspaper. He states that the evacuation of the Kontu region is ‘my political promise’. In the eyes of the Muna Regent, failure to clear out the Kontu region would be a personal failure that could have political implications. This is the arrogance of a ruler who personifies power as if it is clutched in the hand of one person, and forgets the main function of government, namely service of the people’s interests, not service of the Regent’s interests.

Even if conditions return to normal, it is therefore quite possible that the embers will fire up again unless the Kontu case is completely resolved.

Groups Slam World Bank’s Support for Massive Indonesian Plantation Increase

Wednesday, February 21, 2007

CAPPA, Yayasan Keadilan Rakyat, WALHI South Kalimantan, Yayasan PADI, WALHI National Executive, NADI, Environmental Defense ,Friends of the Earth-International

Jambi, Kalimantan, Jakarta (Indonesia) / Amsterdam (the Netherlands) / Honolulu (US), February 21, 2007-- Groups from three countries, today slam World Bank' support for increased industrial plantation scheme in Indonesia.

“In Indonesia, plantation establishment has traditionally been linked to extraordinary deforestation, uncontrolled forest fires impacting local communities and neighboring countries and significant human rights violations”, said Rivani Noor of CAPPA in Sumatra, a local NGO based in Jambi province of Indonesia.

The Bank’s plan identifies as “among the highest priorities”, support for the Department of Forestry’s plan for the acceleration of plantation development which includes the establishment of 5 million hectares of industrial timber plantations and 2 million hectares of so-called “community forests”.

“The push to establish between 5 to 7 million hectares of industrial plantations will cause tremendous harm to our forests and the women and men whose livelihoods depend on them,” said Farah Sofa, WALHI, the Indonesia's largest environmental group.

“So-called plantation - community “partnership” programs have generated conflicts, impoverishment, and environmental degradation for decades, said Rukaiyah Rofiq of Yayasan Keadilan Rakyat, a local group based in Jambi Province of Indonesia. “Lack of recognition of adat and community land and forest rights, the use of military security forces on behalf of plantation companies, the loss of lands due the vastly unequal power of the partners are all tremendous problems with ‘community plantation’ programs.”

“We oppose the application of ‘plantation partnership’ programs in the continued absence of full prior recognition of indigenous forest and land tenure rights,” said Koesnadi, Yayasan PADI of East Kalimantan.

Between 1985 and 2004, “donor” funding for Indonesia’s forestry sector totaled over US$1 billion, with the Bank providing approximately one third of these funds many of which must now be paid back by the Indonesian people. During this period, massive overcapacity was established in the forestry sector, illegal logging grew to astonishing proportions, the land and forest rights of indigenous communities were increasingly violated as entire areas were subject to military intervention on behalf of forestry companies, said Titi Sintoro, NADI.

“It is important to remember that the Bank withdrew from Indonesia’s forestry sector after disastrous projects with irreversible impacts on forests and indigenous peoples,’ said Dr. Stephanie Fried of Environmental Defense, U.S.A. “We do not see substantial positive change in terms of illegal logging, corruption, and human rights in Indonesia’s forestry sector.”

In the new plan, the Bank admits that the Indonesian forestry sector suffers from tremendous overcapacity, including large bankrupt paper and pulp mills operating without a legal supply of timber. The report mentions “corrupt practices” apparently involved in the sale and debt restructuring efforts of major forestry companies and cites as a “moral hazard” inappropriate debt write-offs and settlement agreements which plague the sector. Rather than recommending a downsizing of the industry in line with bankruptcy proceedings, however, the Bank calls for a vast increase plantation establishment which would keep these companies and, apparently, new companies planning on constructing additional mills afloat. The Bank suggests as a “policy of convenience” that “on conversion forest land, it may be appropriate to allow some added timber harvest (and forest/land damage) in the short run to balance industrial timber demand and supply”.[1]

“Reducing overcapacity in the forestry sector, through the downsizing of bankrupt companies and preventing the establishment of additional industrial capacity including new paper and pulp mills is one of the key first steps which must be undertaken to bring demand into line with legal timber supply, “ said Berry Nahdian Forqan, Director of Walhi South Kalimantan. “The troubled United Fiber System and Kiani Kertas mills are the perfect example of financially unstable companies without access to sufficient legal timber.” (See enclosed documentation on UFS and Kiani Kertas.)

“The bank claims to have followed a process of consultation during the development of this plan”, said Rivani, Facilitator of CAPPA. “Despite our repeated requests, they have refused to provide copies of their draft strategy and plan in Indonesian language, making it impossible to carry out proper consultation with affected peoples. It is as if nothing has changed.”

For more detailed information about the World Bank's history and involvement in Indonesia forestry sector, please see attached background information. For information on current attempts to expand the pulp and paper sector, see the attached account of proposed UFS and Kiani Kertas chip and pulp mills in Kalimantan.

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Background Information
Today, the World Bank is launching a new “strategic plan” for re-entry into the Indonesian forestry sector in support of a massive industrial plantation scheme promoted by the Indonesian government”.[2]

The Bank withdrew from direct involvement in Indonesian forestry sector finance almost a decade ago after disastrous projects with “serious and probably irreversible impacts on the forests and indigenous people[s]” of Indonesia, according to the Bank’s own auditing department, the Operations Evaluation Department.[3]

In 2000, during the World Bank’s regional consultation on Forestry Policy, prominent Indonesian NGOs, including WALHI, ELSAM, INFID, Solidaritas Perempuan, LPPMA, YALI, KSPPM, Evergreen KSPHK, called on the World Bank and the Government of Indonesia to take crucial measures prior to any consideration of engagement in the Indonesian forestry sector. Most of these core steps – necessary for the establishment of a sustainable and socially equitable forestry sector –have not been taken. They continue to be as important in 2007 as they were in 2000:

1. Any forest sector strategy must be predicated on prior full legal recognition by Indonesia of hukum adat,/ hak atas hutan adat -- indigenous rights to land and forest.
2. Postponement of Bank adjustment loans, which the 2000 OED study indicated have significant impacts on forests, until there is clear "ownership" by GOI of loan conditionalities including:
3. Prosecution of 176 companies alleged to have been involved in setting forest fires and not yet prosecuted;
4. Cancellation of the logging concession/plantation system that the OED identified as a “moral hazard” Revision of forestry law 41/1999 to recognize the rights of indigenous peoples and their forest management systems
5. Redefinition the forest areas in a participatory manner working together with indigenous and other forest dwellers;
6. Given the overcapacity in the paper and pulp sector identified by the OED as the largest threat to Indonesia's forests, and research indicating the likelihood that the paper and pulp sector is supplied by illegal logging, focus on reducing overcapacity in this sector.
7. Strong governmental action against private sector debtors in forestry sectors (in 2000, 70% of forest related debt was held by 10 big conglomerates including those owned by Bob Hasan, Barito Pacific, Salim group, Sinar Mas, etc). Do not absolve these debts. Collect where collection is possible. Shut down operations, including paper and pulp, where bankrupt. Private debts must not be come public debts.
8. Cessation of the use of military security forces in forest sector management.

Walhi: Governor Aceh, Immediately Implementation Plan Moratorium

Banda Aceh - WALHI Aceh assess Governor plan Governance Of Aceh of Drh. Irwandi Yusuf to go into effect Moratorium or interval cut away in Forest Aceh still only limited to governmental campaign and discourse of Aceh in developing trust of public, governmental therefore aceh have to immediately terminate Discourse of Moratorium this Forest with step and action of implementation, otherwise public will become to tire of and doubt of governmental comitmen.

Campaign of Moratorium Forest Aceh which is frequent to be buzzed by Drh. Irwandi Yusuf at event appointment of regent and mayor in Provinsi Aceh some times then not yet expressed big step to be done by government in Forest Aceh reform, because legal forestry permit discourse and illegal only one of the slice of complicated problem of forest of aceh.

According to view of Walhi Aceh, plan Moratorium Forest Aceh represent big scenario in saving of forest of aceh which must be done by government of provinsi later;then of followed by government of town and sub-province. To facilitate plan of moratorium this of field in detail and do not happened doubt to its executor hence Governor have to specify Moratorium Forest Aceh in the form of regulasi or policy of government of provinsi or insist on Parliament Aceh (DPRA) to authenticating it in the form of Qanun, so that there are rule of law in execution of Moratorium.

Plan of Moratorium Forest Aceh have to entangle public widely, do not only On duty Forestry, but Sectoral On duty related to management of natural resources, and society around forest, public and also widely which is have importance to forest of aceh.

Moratorium or interval cut away is stop or coagulation whereas all activities hewing of big and small scale wood (industrial scale) certain for the time being until a condition of which is wanted to be reached. a period to goning into effect of moratorium is usually determined by how long time required to reach the condition.

According to Walhi Aceh, in general plan Moratorium or forestry reform of aceh done with step which is structure, first, started with stop of expenditure of new permissions, both, execution of test totally industrial performance of forestry, third, saving of most threatened forests, fourth, stop whereas all deforestation and solution of potential problems, fifth, prohibition order hewing in forest of aceh.

To fulfill requirement of wood to big industry can use Import wood mechanism, while to answer the demand of domestic requirement or household can fulfill to through scheme of community arranged logging and observed tightly and adapted for requirement of household.

For that Walhi Aceh, urgent of Governor Governance Of Aceh of Drh. Irwandi Yusuf to immediately to discontinue discourse of Moratorium Forest Aceh, but immediately do implementation step by releasing moratorium regulasi and compile step of moratorium in detail. Do this implementation step have to immediately done by Government before public doubt of forest moratorium comitment of aceh. (end).

Moratorium Logging Now

Rully Syumanda
11 April 2007


Save the Forests with your Hands


Proposal for Execution of the Government of Indonesia’s Commitment to Save Remnant Tropical Forests (Indonesian Forum for the Environment, WALHI), May 2007

During 2007, the proposed Moratorium on Logging has been the most-discussed policy anticlimax in the forestry sector. A number of key government officials themselves described a moratorium on logging as the best way to avoid a range of disasters and negative impacts caused by extractive industries in the forestry sector.

When WALHI first proposed a Moratorium on Logging in 2001, we immediately considered the pros and cons. With forestry businesses providing direct benefits to 2.8 million householders and yielding 9 billion dollars in foreign exchange, a Moratorium on Logging would surely contain some economic threats.

By definition, a Moratorium on Logging is the temporary cessation of logging and forest conversion activities. Its objective is to provide some leeway regarding problems in order that a long term and permanent solution be found.

A Moratorium on Logging must be applied for at least fifteen years. Before the end of this period, an evaluation is carried out to re-assess the situation. A fifteen year period is considered sufficient to improve all conflicts in management and policies that often had to be resolved in the field. Fifteen years is also regarded as adequate time to formulate: (1) a protocol for conflict resolution; (2) a standard for ecological service in plantations; and (3) the conceptualization of a community forest system as the standard policy for forests in Indonesia.

Why must there be a Moratorium on Logging?

A Moratorium on Logging is the most sensible choice. Every year, 2.72 million hectares of Indonesian forests are lost. Each minute, an area as large as five soccer fields is destroyed, equivalent to the loss of a forest the size of Bali each year. Considering that just 41.25 million hectares of remaining Production Forest reserves have good forest cover, that the supply of timber inputs from industrial plantations are only sufficient to fulfill the needs of the pulp industry, and that bio-fuel will stimulate acceleration of zoning for oil palm plantations, it is estimated that the natural forests in Sumatra, Kalimantan and Sulawesi will be extinct by 2012. The price of timber these islands, including Java, will escalate dramatically because all timber will have to be shipped from Papua. In 2022, all natural forests in Indonesia will be extinct and the price of timber will climb once again because wood will have to be imported from China and/or Vietnam.

Acceleration in development of Community Forests could indeed suppress the rate of logging. However, if Community Forests are established in 2008, yields will only be realized in 2016, by which time the natural forests of Sumatra, Kalimantan and Sulawesi will already be extinct, following the footsteps of natural forests in Java.

Various initiatives, like FLEGT, are unable to suppress the rate of destruction because FLEGT is administered by the European Union and only regulates law enforcement, management, and timber trade destined for Northern countries. FLEGT never addresses the fundamental roots of forestry sector problems, namely, acknowledgement of community rights, corruption, and the large discrepancy between supply and demand in the forestry industry. Moreover, FLEGT does not address the pattern of consumption in Indonesia, which is the critical factor spurring accelerated deforestation.

Initiatives, such as certification, will do nothing to resolve the problem if they continue to be voluntary. The Green Label applied to forestry products has in practice provided no added value to sold products, though this was the theoretical objective. The communities of consumer countries like Europe, Japan and China, in reality care little whether the timber they buy is derived from a sustainable source or not. Lower price is still the main choice of consumers in these importer countries. Also, certification can cast a false illusion of sustainable forest management, and can shift the focus from the real fundamental problems. This does not mean that campaigns for the use of materials from sustainable sources must be stopped, nor that consumption of raw timber materials must be stopped. However, even if these objectives are achieved, we will still be faced with extinction of Indonesia’s natural forests.

These concerns arise from the realities of forestry industry itself. The rate of illegal logging in 2006 was greater than 19 million cubic meters, causing a loss of Rp 22.862 trillion rupiah. This figure is slightly less than the foreign exchange obtained from forestry exports, excluding pulp, which only reached Rp 29.536 trillion. However, if we add the direct losses from flooding and landslides in the same year, which cost Rp 8.158 trillion, total losses come to Rp 31.020 trillion.

In sum, the forestry industry contributes Rp 1.484 trillion to the national foreign account deficit each year. This excludes losses from timber smuggling, costs of conflict, and the ecological value of forest resources.

Solving the problems of the forestry sector will not be easy. Anti-poaching operations have addressed less than 8.7 percent of illegal logging, and the operational costs of these programs are not trivial, though far less than the losses caused by poaching activities themselves, which extend beyond the timber smuggling problem.

Efforts to revitalize and restructure the industry conflict with attempts to increase industrial capacity. After the auditing of industries, for which results remain unknown, the government increased the pulp production capacity in Sumatra. In addition, they plan to build pulp industries in Kalimantan and Papua.

In sum, many agendas diverge in the forestry sector. On the one hand, problems of disaster and conflict incur large costs. On the other hand, there is a push to continue extraction to fill foreign exchange reserves and pay off debts in industries accountable to the National Banking Restructuring Agency.

This has led to regency-level development/growth of industry that the central government may have incomplete information about or may be unaware of, such that forestry development planning can only be based on assumptions. Working out solutions for forestry sector development fails to take three basic issues into account: (1) lack of acknowledgement of people’s rights; (2) corruption; and (3) a huge discrepancy between supply and demand in the timber industry.

A Moratorium on Logging was taken up as an alternative because of the many interests requiring some form of improvement. The large number of agendas made it difficult to find a single solution. Through a moratorium, all of these agendas can be put on hold so that overlapping problems in administration and policy can first be improved.

The same goes for conflict resolution. The regulation of standards related to permits and the system of community forest management can be reviewed more clearly.

The Benefits of a Moratorium on Logging

A Moratorium on Logging will have multifold benefits in improving management of forest resources and the sustainability of the timber industry, including:

a) Provide the natural forests with political and ecological space in which to ‘breath’ and halt the continuing destruction of tropical forests in Indonesia;

b) Provide the best opportunity to monitor timber-tracking and log-auditing activities, as well as to catch illegal logging using satellite monitoring technology;

c) Provide an opportunity to restructure the forestry industry and tenurial rights to forest resources, and to increase the yields of non-timber forestry resources;

d) Correct domestic timber market distortions by opening the tap on imports as wide as possible, so that domestic timber market prices become comparable to world log prices;

e) Through the market mechanism, conduct restructuring and industrial rationalization of timber processing and correct excessive industrial capacity: only industries that carry out business genuinely and competitively are allowed to continue their enterprises and those dependent on illegal timber supplies will be unable to compete;

f) Through the market mechanism, force timber processing industries to improve the efficiency of their raw material usage; and

g) Through the market mechanism, encourage pulp industries to seriously establish plantation forests.

Losses if there is no Moratorium on Logging

Indonesia will suffer huge losses in the future if a moratorium on logging is not put in place now, including:

a) The Government will be unable to effectively monitor illegal logging activities;

b) Market distortions will be uncorrectable and wastage of logs will continue;

c) No incentive for industries to improve the efficiency of their raw material usage or to import more;

d) Pulp industries will continue to postpone development of plantation forests and will further destroy the natural forests;

e) The forestry industry’s deficit of Rp 1.484 trillion per year from illegal logging and disasters will be unstoppable;

f) The lowland forests in Sumatra will be lost by 2009, lowland forests in Kalimantan lost within the next five years, and lowland forests of Papua will be lost within the next fifteen years;

g) We will lose the basis of non-pulp industries, which would otherwise contribute US$ 4 billion in future foreign exchange. With the forests gone, hundreds of thousands of workers in this sector will lose their jobs in the next seven years.

The Government of Indonesia’s Commitment to Forestry Reform

At the ninth CGI meeting from 1-2 February 2000 in Jakarta, the Government of Indonesia via the Minister for Forestry and Plantations declared eight government commitments during the forestry session, as follows: (1) a moratorium on the conversion of natural forests; (2) closure of debt-laden industries; (3) elimination of illegal forest logging; (4) restructuring of timber processing industries; (5) recalculation of the value of forest resources; (6) linkage of reforestration programs with industrial capacity; (7) decentralization of forestry administration; and (8) formation of a national forestry program.

In its November 2000 action plan, addenda to these commitments included: (9) tackling forest fires; (10) restructuring tenurial rights; (11) taking inventory of forest resources; and (12) improving the forest management system.

The twelfth step would entail fundamental change in forest resource management to become more sustainable. To execute its commitments, the Government of Indonesia formed an Inter-Departmental Committee on Forestry through Presidential Decree No. 80/2000 on 7 June 2000, responsible for coordinating and implementing all government commitments in the forestry sector.

Stages of the Moratorium on Logging and Implementation of Forestry Reform

The Moratorium on Logging is merely a process, and not the end goal. It offers an opportunity to carry out reform planning and implementation of government commitments in the forestry sector. The Moratorium on Logging is also the initial step for these reforms.

Steps of the Moratorium on Logging could be implemented over three years in the following stages:

Stage I: Stop the issue of new permits

A stop on the issue or renewal of new forestry concessions, work contracts, and plantation permits, as well as releasing an import policy for the timber processing industry. A moratorium on permits is an absolute requirement of, and simultaneously the first stage in, the implementation of a Moratorium on Logging in Indonesia.

Reform commitments performed at this stage could include commitments #1 (a moratorium on the conversion of natural forests) and commitment #10 (restructuring of tenurial rights).

Stage II: Thorough evaluation of forestry industries’ performance

Within 2 months of the Moratorium on Logging being implemented, a stop on forestry concessions would cause problems, primarily for those whose credit will be disrupted and who are handled by the National Bank Restructuring Agency. Debt must be repaid by the owners and law enforcement applied to problematic industries if necessary. At this stage, evaluation of the assets held by problem industries must be carried out through independent third parties as due diligence.

At this stage, the Government could implement commitment #2 (closure of debt-laden industries) and commitment #5 (recalculation of the value of forest resources).

Stage III: Salvaging the most threatened forests

Within 6 months, the Government must stop all timber logging in Sumatra and Sulawesi, the two islands on which forests are most threatened, and restructure the forest areas in Sumatra and Sulawesi, as well as managing social problems that have arisen as a result of the Moratorium on Logging by re-employing workers in tree-planting and forest monitoring projects, such as has been done in China.

During this third stage, the Government could perform commitment #4 (restructuring the timber processing industry); commitment #6 (linking reforestation programs with industrial capacity); commitment #7 (decentralization of forest administration); and commitment #3 (stop on illegal forest logging).

Stage IV: Temporary stop on all forest logging and resolution of potential social problems

Within one year of the Moratorium on Logging being implemented, the Government could stop all timber logging activities in Kalimantan. Handling of social problems that have arisen so far and during the Moratorium on Logging could be carried out through a national policy, while a Protocol for Conflict Resolution and Standard for Ecological Service needs to be developed for regional areas as a forum under ongoing development.

During this period, the Government could also formulate a policy that provides incentives to development of downstream industries for superior commodities, which aim to absorb the workforce from the forestry sector while simultaneously contributing added economic value.

During this stage, reforms could be implemented that carry out commitment #12 (improving the forest management system) and commitment #8 (formation of a national forestry program).

Stage V: Temporary prohibition on forest logging throughout Indonesia

Within 2-3 years: a stop on all timber logging in natural forests for a stipulated period throughout Indonesia. During this period, logging would only be permitted in plantation forests or forests that are managed by local communities.

During this stage, the Government could carry out commitment #9 (tackling forest fires) and commitment #11 (taking inventory of forest resources).

During the Moratorium on Logging, timber industries could continue to operate by importing timber raw materials. Continuing to use timber raw materials from domestic sources would essentially be suicide. To facilitate monitoring, the types of imported timber should be different to timber types available in Indonesia.

Destructive Logging and Deforestation

Rully Syumanda

Jakarta, 10 April 2007

The deforestation problem in Indonesia is spreading. Illegal and destructive logging is a major cause. In addition, conversion of forest areas for the development of oil palm and the pulp and paper industry has been substantial. Since the beginning of this decade, as much as 2.8 million ha of Indonesia’s forests have been lost each year to illegal and destructive logging. This has led to US $4 billion or 40 trillion rupiah in losses to the State per year.

If we put two and two together, forest conversion and the pulp and paper industry are also causal factors in the rising rate of deforestation. We know that some 15.9 million ha of natural tropical forest has been cleared for forest conversion. The conversion of forests for oil palm development is a contributing factor to the increase in deforestation in Indonesia. From being prime land, 15.9 million ha of natural tropical forests have been cleared. On the contrary, there has been no meaningful increase in planted land area. Plantation area has only increased to 5.5 million ha in 2004, from 3.17 million ha in 2000. More than 10 million ha of forest have been abandoned after the ‘harvest’ of the wood crop growing there.

Similarly, the pulp and paper industry have also brought problems. This industry needs at least 27 million cubic meters of timber each year (Department of Forestry, 2006). Since plantation forests can only supply 30 percent of the total demand for pulp, this industry continues logging activities in natural forests, harvesting some 21.8 million cubic meters in order to fulfill its annual requirement. The timber obtained from natural forests is owned by company affiliates or taken from the concessions of its partners. This is not mentioning plywood or other trades, for which only 25% of timber requirements are supplied by plantation forests.

The negative impacts of forestry crime in Indonesia are described above. Economic losses from forestry crimes such as illegal logging, conversion of natural forests, and so on, are calculated to reach 200 trillion Rupiah. This loss does not include ecological disasters caused by illegal logging activities, such as floods and landslides, which now occur frequently in all corners of the Archipelago.

WALHI deduces that the ecological degradation caused by forestry crimes is caused, at least, by two major factors: (1) differences in the outlooks and value systems upheld by the community, the forestry department, and the government (both local and central); and (2) erosion of the judicial process due to corruption, collusion and nepotism. At this point, enforcement of the law is inconsistent.

Inconsistency in the judicial process is caused by the viruses of corruption, collusion and nepotism, which intricately bind the immediate interests of law enforcers (and even bureaucratic officers) throughout the judicial process, starting with the police, attorneys and the judiciary. The result is that anti-illegal logging operations in Papua Province (March 2005) failed to catch top-rung criminals or their protectors in the police force and military. From this operation, 186 suspects were arrested. But, until January 2007, only 13 suspects had been successfully prosecuted and not one syndicate leader has been caught. From the 18 major cases that have reached court, all accused have been released.

Furthermore, differences in the outlooks and value systems upheld by the community, the forestry department and the government (both local and central) have been a major factor in the increasing rate of forestry crime. From the community’s perspective, forests function to protect people from high winds, drought and erosion. The forestry department also recognises the ecological functions of the forests; however, illegal clearing and logging are allowed to continue in accordance with the economic calculations maintained by the forestry department. Similarly, the government’s stance also draws from economic aspects of forests rather than its ecological functions. For them, the forests are a resource with abundant natural resource wealth that must be extracted for the national income. Unfortunately, the development policies that are implemented do not favour forest sustainability.

As we track the rate of forestry crime (illegal logging, conversion of forests without replanting, the unlimited thirst of the pulp and paper industry for wood), it is clear that the government needs to halt several forms of forestry crime that have the potential to trigger a series of ecological disasters, such as floods, landslides, and drought. In addition, community involvement (especially the traditional community) in securing forest conservation is highly necessary. Moreover, the seriousness of all law enforcers (starting with the police force, attorney, to the judge) is crucial to stopping deforestation associated with forestry crimes. Without the serious involvement of all parties in carrying out surveillance, it is quite possible that Indonesia’s forests will be completely cleared in the not-too-distant future.

Finally, deforestation as a consequence of illegal logging is caused, at least, by three major factors, that is, the lack of acknowledgement by the government of people’s rights to manage their forest resources, widespread corruption in various sectors of forest resource management, and the large gap between supply and demand. If these three factors are not immediately overcome – make no mistake – Indonesia’s forests will be rapidly cleared within a short timeframe.

Who are the Climate Leaders?

As the EU, the US and big business vie with each other to be recognized as taking serious action on climate change, Larry Lohmann wonders whether the real leadership is not to be found elsewhere.

Forget, for a moment, the Kyoto Protocol and the EU Emissions Trading Scheme. Leave aside the burgeoning carbon “offset” business. If you’re looking for real progress on climate change, your time might be better spent paying a visit to a couple of coastal towns in Southern Thailand.

For travellers on the road from Bangkok to Malaysia, the crossroads at Bo Nok – Baan Krut might seem only a collection of rice fields, fishing boats, tourist resorts, coconut trees, temples and shops. Yet this is a community that defeated corporate and state plans to build one of the biggest coal-fired power plants in Thailand on its beachfront.

The victory cost years of sweat and blood. Charoen Wat-Aksorn spoke up about corrupt land grabs connected with the project and was murdered in 2004. Other villagers spent countless hours exposing the fraudulence of its environmental impact assessment – in recognition of which Jintana Kaewkhao, a local woman who never finished high school, was awarded an honorary Ph.D. Today the community is consolidating its gains, exploring wind-powered electricity and lending a hand to communities battling fossil fuel projects elsewhere.

One such community lies several hundred kilometres south in Chana district. Chana’s local monster is a prestige Thai-Malaysian natural gas pipeline and refining venture backed by Thailand’s ousted tycoon Prime Minister Thaksin Shinawatra.

Chana is less lucky than its sister community to the north. After years of fraudulent land deals, bribes, and intimidation and beatings by police, a huge gas separation plant now defiantly sits on community wakaf land, a supposedly inalienable Muslim commons entrusted to God, drawing gas from a pipeline illegally forced across a local beach. A gas-fired power plant is going up. Chemical works may not be far behind. But villagers are not giving up. They say that they are fighting not only for their lives and religion, but for a natural heritage that belongs to the whole country.

Some professional climate activists slight such local struggles as secondary to the task of negotiating global emissions reduction targets. They forget that dealing with climate change means, above all, finding practical means of keeping fossil fuels in the ground. As eminent climatologist Jim Hansen reiterated in June, burning the Earth’s remaining coal, oil and gas “would guarantee dramatic climate change, yielding a different planet from the one on which civilisation developed.”

No one is better informed about what it will take to prevent that happening than communities like Bo Nok and Chana. Their experience reminds us that however brilliantly the world theorizes ways of getting carbon out of energy, it is also going to have to get energy companies out of fossil fuel deposits. Any serious climate change movement will have to connect with such communities everywhere, whether they are battling Shell in the Niger delta or in Rossport in Ireland or contesting the huge new National Grid gas pipeline in South Wales. These are communities dialled into the politics of the future.

In the absence of a climate movement empowered and informed by such communities, every step governments and corporations take on climate change is likely – by contrast – to be a step into the past. Politicians and business will keep on presenting ambitious climate goals for public consumption without seeking the practical means necessary to achieve them.

UK officials, for example, talk of reducing greenhouse gas emissions by 60 per cent by 2050. Yet they promote airport expansion, back World Bank efforts to ramp up fossil fuel use worldwide and are committed to large-scale carbon trading – a messy US invention that only slows the transition away from fossil fuels. As Oxford development studies professor Barbara Harriss-White remarks, it’s hard to see what British climate policy is doing “other than serving as a mass tranquilizer.”

In the private sector, meanwhile, banks such as Barclays parade plans to go “carbon neutral”, while at the same time expanding fossil fuel investment and their fossil fuel trading teams. Emblematically, Barclays has even pitted itself directly against the hydrocarbon protesters of Chana. With an investment of US$257 million, Barclays Capital leads the consortium of banks supporting the Trans Thai-Malaysia gas project. Despite repeated invitations, none of its 13,200 worldwide staff has ever even visited the Chana villagers. Contempt – not only for local livelihoods, but also for the aspiration for a livable climate – doesn’t come much clearer than that.

Chico Mendes, the Brazilian unionist who was murdered in 1988 while working to save the jobs of rubber tappers threatened by Amazon clearance, had a famous saying. “At first I thought I was fighting to save rubber trees,” Mendes said. “Then I thought I was fighting to save the Amazon rainforest. Now I realise I am fighting for humanity.”

Villagers in Bo Nok, Chana and elsewhere could say the same. Who are the real climate leaders? It may be time for a rethink.



Larry Lohmann of The Corner House is the editor of Carbon Trading: A Critical Conversation on Climate Change, Privatisation and Power. An account of the struggle in Chana can be found at www.thecornerhouse.org.uk.

World's Biggest Palm Oil Trader Shamed

JAKARTA (INDONESIA) / AMSTERDAM (THE NETHERLANDS) - JULY 3 - Wilmar, the world’s biggest trader in palm oil, is illegally logging rainforests, setting forests on fire and violating the rights of local communities in Indonesia, according to a new report published today by Friends of the Earth Netherlands. [1]

Paul de Clerck, Corporates Campaigner at Friends of the Earth International, said: “This report reveals that Indonesian palm oil traded by Wilmar is scandalous and damaging the environment. Forests are being cut and burnt down illegally, Indonesian laws are being broken and local people are suffering.”

Europe is one of the world’s biggest palm oil importers, with palm oil used as an ingredient in many food products and cosmetics, and increasingly as a biofuel. Wilmar supplies multinational companies such as Unilever, Nestle and Cargill.

Rully Syumanda, Forest Campaigner at Friends of the Earth Indonesia / WALHI said: “Europe's growing demand for palm oil is leading to environmental and social devastation”.

The palm oil industry has attempted to market the trade as environmentally and socially sustainable, but this report exposes these policies as hollow and inadequate. Singapore-based multinational Wilmar is a member of the industry-led Round Table on Sustainable Palm Oil (RSPO) and is funded by the World Bank’s private arm as well as private European banks which have codes of conduct against unsustainable palm oil. Rabobank and Standard Chartered Bank are the main European financers.

Anne van Schaik of Friends of the Earth Netherlands (Milieudefensie) said: “Rabobank apparently has a code of conduct for financing palm oil, but absurdly this doesn’t apply to the handful of general loans that the bank gives to Wilmar. The code of conduct is therefore meaningless – boosting Rabobank’s image but doing nothing to protect against illegal deforestation.”

The report demonstrates the danger of the European Union’s recent commitment to replace 10% of its transport fuel market with biofuels by 2020.

“If the European Union continues to promote palm oil imports in order to meet its recently-adopted 10% biofuels target, this will simply aggravate the severe environmental and social impacts in countries like Indonesia. The European Commission should accept that setting such a rigid target was premature and drop it until the situation in producer countries has been fully assessed,” de Clerck added.

Friends of the Earth Netherlands (Milieudefensie) and two Indonesian non-profit organisations investigated three plantations of Wilmar International Ltd. on West Kalimantan, Indonesia. Specifically, the report reveals:

* The Indonesian authorities are suing Wilmar for intentional and systematic illegal burning of forests to clear land for plantations

* Wilmar has violated an Indonesian law that requires approval of the Environmental Impact Assessment before palm oil development begins

* Wilmar is clearing forest beyond its allocated borders and without the legally required permits

* Wilmar has cleared areas of forest that local communities have customary rights to, without even consulting them

Friends of the Earth Netherlands (Milieudefensie) has filed complaints to the Round Table on Sustainable Palm Oil and to the private arm of the World Bank – the International Finance Corporation.

ENVIRONMENT: Clean or Not Thailand Sees Dollars in Palm Oil

By Marwaan Macan-Markar

KRABI, Jul 4 (IPS) - The new governor of this southern province has set his sights on another prize to add to its list of unique features. ‘’We are aiming to be the palm oil capital of Thailand,’’ says Siwa Sirisoawaluk who has been Krabi’s chief administrator for nine months.

He shares his ambition, standing within easy view of a grove of tall palm trees that produce the kind of bio-fuel that is increasingly in demand globally. These trees, locals say, were introduced some three decades ago and are found by roadsides along with the rubber trees that produce another valuable cash crop.

In the main, however, the area that Siwa presides over, is widely known for such attractive features as wide beaches washed by the Andaman Sea, spectacular limestone cliffs and nature trails through tropical forests.

Krabi’s oil palm plantations account for nearly 40 percent of the 320,000 hectares in Thailand where these trees are grown. Bangkok is hoping to have 1.6 million hectares under oil palm cultivation in the next two decades.

Krabi is expected to take the lead in the country’s oil palm expansion drive, adds Siwa. ‘’The supply here is not enough to cater to future demand. We want to remain the province having the largest oil palm plantations in Thailand.’’

It is a vision being advanced by officials at the ministry of energy, too. ‘’You save on oil imports, you help the local farmers growing the oil palm to get a better income and you help to improve the environment,’’ Panich Pongpirodom, director-general of the department of alternative energy development and efficiency, told IPS.

To make this case for the environment, the energy ministry confirmed that the estimated 10,000 petrol stations across the country have to convert by April next year for supplying bio-diesel for which palm oil is pivotal. Major car manufacturers such as Toyota, Honda and Mitsubishi ‘’have accepted our policy’’ to have regular fuel mixed with two percent of ‘’renewable fuel,’’ adds Panich.

Yet, as Thailand looks to the fortunes that palm oil offers other South-east Asian countries that are bigger players in the palm oil trade find themselves caught in an escalating debate.

Countries like Indonesia and Malaysia, two of the world’s leading producers of palm oil, are grappling with the question of exactly how green palm oil is. Environmentalists and grassroots groups are taking on governments in the developed and developing world and the private sector on this score.

Friends of the Earth International (FoEI), a global environmental lobby group, drove home this point Tuesday in a critical report about the devastating impact of palm oil plantations in Indonesia, where the government is planning to convert 20 million more hectares into palm oil plantations.

‘’Wilmar, the world’s biggest trader in palm oil, is illegally logging rainforests, setting forests on fire and violating the rights of local communities in Indonesia,’’ charged the FoEI report.

And it pointed an accusing finger at European countries for contributing to such havoc on the Indonesian environment, since Europe has emerged as ‘’one of the world’s biggest oil importers, with palm oil used as an ingredient in many food products and cosmetics, and increasingly as a bio-fuel.’’

‘’Europe’s growing demand for palm oil is leading to environmental and social devastation,’’ says Rully Syumanda, forest campaigner at FoEI’s Indonesia office.

Wilmar, the multinational company under fire, is based in Singapore. ‘’Wilmar has violated an Indonesian law that requires approval of the Environmental Impact Assessment before palm oil development begins,’’ FoEI researchers reveal after having studied three plantations owned by Wilmar International Ltd in West Kalimantan on the island of Borneo.

Malaysia-based environmentalist Jennifer Mourin is hardly surprised by the intensifying debate over palm oil and its global links. ‘’We cannot have a polluting industry like palm oil go on,’’ says Mourin, deputy executive director of the Pesticide Action Network (PAN), a non-governmental group that champions biodiversity across the world.

‘’There are a lot of concerns about the expansion of the palm oil business in this area. Some of the oldest jungles and places of biodiversity are being hit,’’ she said during a telephone interview from Penang. ‘’We are also worried about the acres of land being reduced to a monoculture.’’

Her group, in fact, was part of a broader coalition of 30 groups from across the world that called for a moratorium on the European Union’s ‘’rush for bio-fuels’’ by offering ‘’incentives for agro-fuels and agro-energy from large-scale monocultures.’’ This initiative, launched in the last week of June, warned that ‘’agro-fuel production for EU markets will accelerate climate change, destroy biodiversity and uproot local communities.’’

In Thailand, which is on the periphery of this debate and is far from being an exporter of palm oil, the environmental cost of palm oil production has still to sink in, particularly among the local communities. Those IPS spoke with are drawn by the financial gains they stand to make with expanded plantations.

‘’We can get a steady income from palm oil because we can work throughout the year, unlike rubber tapping which cannot be done during the rainy season,’’ says Wattana Rerngsamut, who also makes a living as a tour guide. ‘’We can work twice a month, every 15 days, with the palm oil tree.’’

The only concern is the investment palm oil groves require. ‘’We have to buy a lot of fertilizer; it is expensive,’’ he explained. ‘’This is a big problem.’’