Green and wealthy: An Indonesian oxymoron?

Green and wealthy: An Indonesian oxymoron?

Fitrian A. and Israr Ardiansyah, Forest Program,
World Wide Fund for Nature (WWF) Indonesia, Jakarta

Indonesian forests constitute one of the world's megacenters
of biological diversity. However, these forests -- 10 percent of
the world's remaining tropical forests, second largest to Brazil
-- are being increasingly degraded, leaving ever fewer natural
resources and causing significant ecological damage.

Protected areas are diminishing in conservation value as
poorly planned and unsustainable development leads to poaching,
encroachment, habitat fragmentation and forest fires.

These problems have been building for years with the rapid and
largely unregulated exploitation of forests and other natural
resources under the New Order regime. Since the early days of the
regime at the end of the 1960s until today, Indonesian forests
have been a prominent powerhouse of the country's economy, after
oil and textiles.

Unfortunately, to fill the need for economic growth and
alleviating poverty, the government seemingly still sets its
development agenda based on forest exploitation, including
conversion of forests into plantations.

Forest conversion, which was defined as a continuous process
of declining forest functions, has led to man-made monocultures
characterized by the almost complete loss of forest ecological
functions and socioeconomic benefits for local people.

In general, 60 percent of the conversion of tropical forests
in Indonesia is due to the development of oil palm plantations
(WWF, 2002). However, only 30 percent to 40 percent of forest
areas that have been logged were later developed into oil palm
plantations in the last decades in Indonesia.

This phenomenon has contributed to an alarming rate of
deforestation (2.1 million hectares per year according to the
Ministry of Forestry, 2003). Recent assessments estimate that by
2005 lowland forests will disappear in Sumatra and by 2010 in
Kalimantan. If the incidents of forest fires are included, this
prediction may well be true. The usual practice of plantations to
log and then burn to clear the land for planting has worsened the
impact.

The question now is whether forest conversion has increased
the level of wealth of the country, if not the welfare of the
people. One study shows that as a result of deforestation through
2002, Indonesia has lost about US$25 billion from timber and may
continuously lose about US$0.55 billion per annum.

Other findings also show that conversion comes with severe
environmental and social costs. These include the loss of high-
conservation-value forests, human-wildlife conflicts (in Riau,
the cost of human-elephant conflicts have reached Rp 1.3 billion
per year, or 86 percent of Riau's 2002 provincial budget),
massive forest fires, the loss of ecosystem functions and
services and disregard for the rights and interests of indigenous
communities or forest-dependent people.

Although the country's earnings from palm oil exports have
increased, unfortunately, profits from forest conversion only go
to a few people within and outside the country. On the other
hand, forest-dependent people and the majority of Indonesians are
yet to benefit from conversion.

Another issue to be raised is whether we have to stop
developing the oil palm sector. Although concerns about massive
impacts resulting from oil palm development have increased, many
environmental organizations (ENGOs), including the WWF, recognize
the need of countries like Indonesia and Malaysia to develop and
provide for their people.

Therefore, while seeking to ensure that important high-
conservation-value forests (HCVFs) do not disappear, some ENGOs
have been trying to open a dialog with the palm oil industry to
search for sustainable solutions. For instance, the WWF network
has been opening a dialog with Migros (Swiss retailers),
Unilever, ABN-Amro Bank, the Malaysian Palm Oil Association and
the Indonesian Palm Oil Producers Association (GAPKI).

One area that is being carefully looked at is good land use
planning that incorporates the need for oil palm development as
well as HCVF conservation. If we analyze the figures of the areas
that have already been opened, 60 percent to 70 percent have not
been utilized as oil palm plantations.

This means that a huge figure (3 million to 4 million
hectares) of abandoned land, wastelands or land with absentee
ownerships is available to be used at this particular point of
time and in the future. Integrated and coordinated land use
planning at different levels (district to national), in this
case, is extremely necessary.

Another important solution being discussed between ENGOs and
companies is the implementation of several better practices for
sustainable palm oil production. These practices cover guidelines
on protecting, maintaining and restoring HCVFs within plantation
areas; mitigating human-wildlife conflict; resolving social and
tenurial conflicts; adopting a zero burning policy; implementing
integrated pest management; and managing waste.

The coming Roundtable Discussion on Sustainable Palm Oil in
August 2003 in Kuala Lumpur, incorporating key actors in the
entire chain of the oil palm sector and other interested parties,
will be used as a starting point to have sustainable produced
palm oil that balances economic and environmental aspects.

Some key Malaysian companies such as Golden Hope Plantation
Bhd has seen this as a good opportunity to enter markets in the
developed world. If the Indonesian industry does not recognize
this potential, it may lose a significant market share in Europe
to competitors. And for the rest of us, we may end up
experiencing more disasters as a result of ongoing deforestation.

Fitrian A. holds a master's degree in environmental management
and development from the Australian National University. Israr
Ardiansyah graduated from Gadjah Mada University's School of
Forestry. Both work for WWF Indonesia-Forest Program.