Indonesia: Land-swap to cause pessimistic jobs & economy outlook

Mongabay: Land-swap rule among Indonesian President Jokowi’s latest peat reforms

Source: Getty images

 

  • To prevent another round of devastating wildfires, Indonesian President Joko Widodo’s administration has issued a series of policies governing the management of peatlands — carbon-rich swamps that have been widely drained and dried by the nation’s agribusinesses, rendering them highly flammable.
  • The administration hopes a new land-swap scheme will help it claw back peat from big oil palm and timber planters, providing a means to supply the firms with additional land elsewhere in the country.
  • Business associations complain about the new policy, saying it’s not feasible for a company in Sumatra to move its operations all the way to Papua.
  • Environmental pressure groups, meanwhile, call the regulation an unfair boon for large firms, providing a rapacious industry with more land than the vast amounts it already controls.

JAKARTA — Indonesia, a country known for its annual forest and peat fires, is overhauling its peatland management policies, an effort triggered by the great fires of 2015.

2015 was a turning point for the archipelago nation as it experienced one of its worst fire and haze episodes ever. That year, the fires burned an area four times the size of Bali, affecting tens of millions of people and, according to the World Bank, wiping off $16 billion from Indonesia’s GDP, more than double the damage and losses from the 2004 tsunami. The root cause of the fires is the drainage of Indonesia’s vast peat swamp zones by the palm oil and paper industries. Desiccated peat is highly flammable.

In the wake of the disaster, President Joko Widodo, popularly known as Jokowi, declared a moratorium on new peatland conversion, even within existing concessions. Last December, he cemented the moratorium via a presidential decree, which carries the weight of a law. The decree says the moratorium will remain in place until the government finishes mapping and zoning the nation’s peatlands for conservation and production.

The decree has since been followed up by a series of implementing regulations issued by the Ministry of Environment and Forestry, containing detailed instructions on how to comply.

A series of follow-up regulations

In February, four ministerial regulations were issued by the Ministry of Environment and Forestry. The first one (PermenLHK No. 14/2017) provides guidelines for determining whether a peatland should be zoned for conservation or production.

The second one (PermenLHK No. 15/2017) provides guidelines for how to measure the water table in a peat landscape. The law forbids companies from letting the water table in their concessions drop below 40 centimeters, but there is some debate over where the water table should be measured from.

The third one (PermenLHK No. 16/2017) is a technical guide to peat ecosystem recovery for all stakeholders, such as the government, rural communities, and the private sector.

The fourth one (PermenLHK No. 17/2017) concerns the development of timber plantations, which stipulates various obligations and compensations for pulp and paper companies. For instance, companies which concessions fall within conservation areas would be able to request substitution land.

Further, the ministerial regulations contain technical details of the moratorium enshrined in Jokowi’s 2016 decree, which says companies can’t plant on peat zoned for conservation.

Plantation firms already operating in conservation areas can see their crops through for the duration of their life cycle, after which they cannot replant the land, but are required to rewet the peat for conservation purposes.

Before starting the whole process, companies must submit their working plans based on Indonesia’s peatland hydrological area map, which divides the country’s peatland areas into two categories: conservation and production.

According to the map, which was recently completed by the ministry’s environmental pollution and damage control directorate general, there should be 12.4 million hectares of conservation areas and 12.2 million hectares of production areas.

A company’s working plan contains details of its operation map as well as its plans to recover its peat areas and convert back its concessions that fall within conservation areas to be used for conservation purposes.

“The recovery [of peat areas] can’t be done if the working plans are not approved [by the ministry] because the plans are the companies’ promises on where to recover each year,” Bambang Hendroyono, the environment ministry’s secretary general, said during a recent panel discussion in Jakarta. “Once the working plans are approved, the companies have to start the recovery process within six months.”

According to Hendroyono, the ministry has identified 97 timber plantation firms that must rehabilitate peat in their concessions.

“All 97 firms have submitted their working plans and we have given them direction to revise their plans,” he said. “As long as the working plans haven’t matched [the requirements], we will keep chasing them until they follow the regulations.”

Three of the 97 companies have had their working plans approved by the ministry. They are PT Dharma Hutani Makmur, PT Taiyoung Engreen and PT Hutan Ketapang Industri.

“Because their peat areas are small and they have met all requirements stipulated in the regulations without the need of land swap,” Hendroyono said. “Furthermore, there are 23 companies which have received direction for improvement on their working plans. If they have met the requirements, then these 23 working plans can be approved.”

Land-swap scheme

The ministry’s most recent regulation is No. 40 (PermenLHK No. 40/2017) on a mechanism for land swaps, which outlines the requirement of timber planters to manage substitution land in their concessions.

Under the regulation, the government will substitute the land of timber plantation firms whose concession comprises at least 40 percent protected peatland by the government’s map.

Based on the map, there are 910,393 hectares of concession areas which located inside protected peat areas and thus are required to be swapped with government-provided lands.

“People are saying that there’s no more available land, it’s not clear and there’s no way to know when [the land swap process] will be finished. But the government has to be able to facilitate it,” Hendroyono said. “We are promising the new lands to be ready in three months because we know where the empty lands are.”

The government has located empty lands throughout Indonesia to be swapped. There are 300,390 hectares of land in Kalimantan, 281,195 hectares in Sumatra, 101,210 hectares in Maluku, 158,145 hectares in Papua, 60,515 hectares in Nusa Tenggara and 11,060 hectares in Sulawesi.

“These lands are located in former industrial forest concession areas that are not productive as well as areas which have been requested [by companies] but have no permit yet. In total, there are around 900,000 hectares of such lands,” Hendroyono explained.

According to data from the ministry, there are 507,410 hectares of land that have been targeted for industrial forest purposes but have no permit yet, and thus can be used for the land-swap scheme.

“With the issuance of the land-swap regulation, what’s been worried have been addressed. Now is only the matter of how to execute it,” said Drasospolino, director of production forest management unit at the environment ministry.

“We are ready to wait for the working plans to be approved. And we are committed to prioritizing open access areas for concession owners whose areas are located in protected peatlands. This is a part of our commitment so that the concerns that the industry’s productivity will be affected won’t happen.”

Mixed responses

The series of regulations have been met with mixed responses, with businesses calling them too strict while environmentalists say they are too lenient.

Robianto Koestomo, director of timber certification company PT Mutu Hijau Indonesia, said the stipulation that peatlands with a depth of more than 3 meters must be protected would seriously damage the timber industry.

“The harvest [has to] stop, [we] can’t plant again. As a result, factories will stop operating and the employees will be laid off,” he said.

The head of the Indonesian Association of Forestry Concessionaires (APHI)’s branch in Riau, Muller Tampubolon, said that the regulations would result in an annual loss of 9.5 million tons of raw material for the country’s timber industry.

He also criticized the land-swap mechanism, arguing that companies would have to move their operations far from their current concessions given the limited amount of land available in Riau.

According to the government data, there are only 10,000 hectares of land available for the timber industry in Riau. Meanwhile, companies have to return around 400,000 hectares to the government.

“So even if we get the land swap, it is very likely to be outside Riau. And that, of course, have a huge cost,” Tampubolon said.

Meanwhile, the Indonesian Forum for the Environment (Walhi) said the land-swap mechanism was designed to favor the timber industry.

The pressure group said the mechanism would result in companies securing new lands and having the rights to cut down trees in forests with mineral soils.

Furthermore, the group also criticized the lack of an environmental analysis required in the mechanism, which would increase the environmental and social risk posed by the land swap.

Bas Tinhout, the technical officer of climate-smart land use at Wetlands International, said the regulations only provided partial solutions, citing the example of the 40-centimeter water table requirement.

“It’s a first step and a very bold one. I think the government has really cracked down on the issues. However, the 40-centimeter limit is not really enough to safeguard those lands for the future. Because it’s not possible to really keep it 40 centimeters, it’s not implementable,” Tinhout said in an interview.

Therefore, he predicted the annual fire season would keep returning.

“You would see in dry season this will shoot far below 40 centimeters,” Tinhout said. “So you would see the fires. You still have large greenhouse gas emissions. Peat subsidence will continue. It’s shown in science that 40 centimeters can only cut the rate of peat subsidence by 20 percent. So it’s only a partial solution. But we really think it’s the first step and we really hope that the government makes the companies accountable to keep the 40 centimeters rule.”

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