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Debates Heat Up as Indonesian Palm Oil Moratorium is About to be Signed

Deforestation for an oil palm plantation. Habitat loss due to agribusiness expansion is devastating orangutan populations. No one knows how much damage it is doing to orangutan culture. Photo by Rhett A. Butler
  • Announced two years ago, a moratorium on new oil palm permits in Indonesia is about to be signed by President Joko “Jokowi” Widodo.
  • But a coalition of environmental NGOs has criticized the latest draft of the moratorium, saying it contains many loopholes.
  • The coalition has submitted a list of recommendations to the government, which has promised to follow up on their concerns.

 

JAKARTA — Two years after he announced a freeze on new oil palm plantation permits, President Joko Widodo of Indonesia finally appears to be on the verge of putting it into effect, ahead of regional elections set to take place this June. But some distance remains between the administration and a coalition of environmental NGOs observing its deliberations, with the latter arguing the moratorium should remain in place for much longer than is being proposed.

The draft of the document enshrining the permit freeze, seen by Mongabay, stipulates it will be enacted for no more than three years. It also mandates a review of existing licenses, since many are known to have been issued in violation of procedures, and a review of those now in the process of issuance.

The document is being prepared in the form of a presidential instruction, which is not legally binding, a concern long aired by NGOs pushing for tough enforcement. It was signed by Darmin Nasution, the coordinating minister for the economy, on Dec. 22, after which it underwent some revision by the Ministry of Environment and Forestry before returning to Darmin’s desk. It now awaits approval from the president.

In the current draft, implementation of the policy would be overseen by a task force established by Darmin’s office. The task force would verify data related to all outstanding oil palm permits, and then provide recommendations to the relevant ministries on how to follow up. This may include rezoning an area as forest, which would be off-limits for oil palm cultivation; revoking a permit; or pursuing criminal charges against law-breaking companies.

President Jokowi, as he is popularly known, declared the moratorium in the wake of the 2015 fire and haze crisis, which pumped more carbon dioxide into the atmosphere than the entire EU economy during the same period. The underlying cause of the disaster was the large-scale drainage of Indonesia’s vast peat swamp zones, mainly by huge conglomerates planting cash crops like oil palm and acacia to feed global markets. Indonesia’s countryside is blanketed in leases belonging to these firms, as well as to companies in the mining and logging sectors.

Since shortly after the 1998 fall of the dictator Suharto, when sweeping authority over land and resources was shifted from Jakarta to district governments, control over licensing for plantations has rested largely in the hands of district chiefs, known as bupati. Many of the permits they have issued are known to be linked to corruption, often for the purpose of financing an election campaign. The permits come down on lands covered in rainforest and rich in wildlife, or claimed by indigenous communities, giving rise to intractable social conflicts as companies operate with impunity, and fueling Indonesia’s sky-high greenhouse gas emissions.

Spurred on by the nation’s anti-corruption commission, known as the KPK, Indonesia’s law enforcement agencies are already bracing themselves for an expected uptick in corruption ahead of the upcoming regional elections. The licensing freeze, said Rabin Ibnu Zainail, director of the NGO Pilar Nusantara South Sumatra, must be an integral part of this effort. “The moratorium will prevent incumbents from selling permits,” he told Mongabay.

An online petition started a month ago by the NGO Auriga Nusantara asks the president to tell bupatis to stop not only “selling” permits but also extending them in the periods immediately preceding and following an election, when candidates either need money for their campaign, or are in hock to businesspeople who helped them win. The petition is also addressed to Indonesia’s governors and to Ignasius Johan, the minister of energy and mines.

The lack of any formal legalization of Jokowi’s permit moratorium was brought into sharp relief last month, when the website ForestHints, a media platform through which forestry ministry officials often release information to the public, quoted one of the ministry’s directors-general as saying that four new permits had been issued to palm oil companies in Indonesia’s easternmost Papua region.

The website referred to “high-density forest cover which dominates” the four concessions, and said one them belonged to the Ganda Group. It did not say who owned the other three. The director-general, Sigit Hardwinarto, declined to name the companies when reached for comment by Mongabay, although he stressed the need to protect Papua’s rainforests.

At present, the nation’s palm oil sector is rife with illegality. In Riau, the main palm oil-producing province on the island of Sumatra, there are 18,000 square kilometers (6,950 square miles) of illegal oil palm plantations with no proper permits — an area two-thirds the size of Massachusetts — leading to an estimated loss of 34 trillion rupiah ($2.47 billion) of potential state income from tax, Suhardiman Ambi, head of the provincial parliament’s licensing monitoring committee, told news portal Detik.

In Central Kalimantan province, on the island of Borneo, only 85 out of 300 oil palm companies have valid permits with “clean and clear” status, meaning they comply with basic laws regarding environmental impact assessments, payment of taxes and royalties, and proper registration of concession boundaries and corporate information, according to the NGO Forest Watch Indonesia (FWI).

And there is also a problem of oil palm permits overlapping with permits for other industries, such as mining and timber. FWI estimates there are at least 46,900 square kilometers (18,110 square miles) of concessions with overlapping permits in Indonesia.

When Jokowi announced the moratorium on oil palm permits back in 2016, he also mentioned that he would impose a moratorium on coal mining permits. However, the current draft of the moratorium doesn’t address coal permits, and it’s not clear when or if such a freeze will be implemented.

 

Time to assess

Twelve NGOs voiced their concerns during a meeting with the Presidential Staff Office, an institution established by Jokowi to oversee his priority development programs, at the end of February.

Representatives from the NGOs submitted a list of 11 recommendations to the office. Among them is a call to extend the period of the moratorium beyond the planned three-year maximum.

“What’s clear is that there should be no more new permits for three years,” Environment and Forestry Minister Siti Nurbaya Bakar told reporters recently in Jakarta.

She said she believed three years was sufficient time for the government to review all permits and take necessary actions.

“I said that two years was actually enough, because we’re just reviewing,” Siti said. “But to give more time, then three years is alright.”

The coalition of NGOs, though, say the moratorium period should not be limited to three years, but instead should remain in effect until it achieves its goals.

“The implementation of this moratorium should be based on criteria and indicator of a certain achievement, not based on a period of time,” the NGOs said in their list of recommendations. “So it’s important for the government to design and announce a mechanism to verify its achievements, priority areas and to ensure the results are open for public.”

Zenzi Suhadi, the head of research and environmental law at Indonesia’s main environmental watchdog, Walhi, said the moratorium should be in effect for at least 25 years in order to give the industry room to breathe. He said it was also necessary to give the government time to evaluate the industry and its economic value compared to other industries.

“During that time, the government could evaluate whether palm oil benefits the country or not,” Zenzi told Mongabay. “With a [plantation] permit lasting for 30 years, the 25-year period will allow the government [sufficient time] to evaluate the industry.”

 

Law enforcement questions

The NGOs also say the draft moratorium is weak in its law-enforcement aspect, with the bulk of that role relegated to the Ministry of Environment and Forestry, and no mention of roles for other law enforcers such as the police or the Attorney General’s Office.

That makes it unclear whether the task force will feature any law enforcement representatives, according to Indonesian Center for Environmental Law (ICEL) executive director Henri Subagiyo.

“The composition of the task force is not clear,” he said in an interview during a recent event in Jakarta.

Teguh Madani, the executive director of the environmental NGO Yayasan Madani Berkelanjutan, who also attended the meeting, said it was unlikely the environment ministry alone could handle all law enforcement aspects required in the palm oil industry.

“If we see the ministry’s budget, it’s very small,” he said in an interview. “Frankly, the government’s attention toward law enforcement is still weak. Meanwhile, law enforcement is the spearhead of the improvement in the management of forests and plantations.”

The NGOs say they are worried that with weak law enforcement, there will be little to no follow-up on the permit review process.

“How can the Ministry of Environment and Forestry solve the 1.8 million hectares of illegal plantations?” Henri said. “The plantations in Riau are not occupied by only one or two people, but by thousands of people. What do we do with them? How can we solve this problem without cracking down on the masterminds behind these illegal plantations?”

The NGOs are pushing for law enforcers, particularly the KPK, to be involved in examining the illegal plantations, seeing how the KPK has already instigated a massive effort to review the legality of thousands of licenses held by palm oil companies across the country.

The KPK also conducted a study on the palm oil industry in 2016 and found there were weaknesses in the permit-issuing mechanism, monitoring and management of the sector.

“We’re hoping that the government will strengthen its cooperation with the KPK in implementing this moratorium, especially to follow up on the KPK’s study,” the NGOs said.

 

‘Legalizing the illegal’

Another contentious point is the mandate for the government to enforce a policy requiring palm oil firms to allocate 20 percent of their concessions for local farmers.

The draft moratorium stipulates that the Ministry of Agriculture must evaluate companies to see whether are complying with the regulation, while the National Land Agency has to speed up the issuance of land permits for local farmers.

Henri said there was still debate surrounding the implementation of the policy, such as the question of whether the 20 percent comprises land outside the concessions, and whether that figure is counted from the total size of the lease or the size of the cultivated area only. He called on the government to make the calculation clear before the moratorium is enforced.

Lastly, activists criticized a point in the draft that exempts concessions in forest areas that have been planted and have had their forest conversion permits processed by the Ministry of Environment and Forestry.

The exemption is a carryover from a government regulation signed by Jokowi in late 2015 about changes in the status and function of forest areas. Article 51 of the regulation stipulates that companies that have already obtained permits from local governments in production forest areas can still apply for a license to convert the status of the area from forest to non-forested area within a year of the regulation being issued.

If the local permits are issued for areas with protected or conservation status, then the companies are still allowed to operate for a full harvest season.

The draft moratorium states that oil palm concessions that have been planted and processed in accordance with the 2015 regulation are exempt from the moratorium, something that activists deem an attempt to legalize something that is illegal.

“This exemption causes the moratorium to be useless because there are many illegal oil palm plantations in forest areas,” the coalition of NGOs said.

Responding to the recommendations, the presidential chief of staff, Moeldoko, said he would study them first, while emphasizing that the moratorium aimed to increase productivity without clearing new lands.

Moeldoko, who like many Indonesians goes by one name, said he would discuss the draft moratorium with related ministries to follow up on the NGOs’ recommendations.

“The Presidential Staff Office will study the 11 recommendations and will ensure to push the direction of oil palm development on increasing productivity sustainably, not through new land clearing,” he said in a press statement published on the office’s website.

 

Source :https://news.mongabay.com/2018/03/debates-heat-up-as-indonesian-palm-oil-moratorium-is-about-to-be-signed/