The Presidential Instruction No. 10/2011 limiting the issuance of licenses for conversion of forest or development of peat is one key deliverable forming part of a bilateral agreement outlined in the Letter of Intent (LoI) between the Government of the Republic of Indonesia and the Government of the Kingdom of Norway on “Cooperation on reducing greenhouse gas emissions from deforestation and forest degradation”. The LoI directly supports GoI‟s own voluntary targets of achieving 26% greenhouse gas (GHG) emissions reduction by 2020 coupled with 7% economic growth (often referred to as the “7/26 objectives” for low emissions development).
A two year suspension on all new concessions for conversion of peat and natural forest is potentially a powerful instrument to achieve the 7/26 objective. The moratorium is not intended to prevent all exploitation of peatlands and natural forest from this point forward, but rather to provide “breathing space” that will provide the Government of Indonesia to acquire necessary data and create mechanisms to coordinate among numerous Ministries and agencies to develop detailed, coherent plans for development, whilst preventing readily avoided irreversible activities from taking place during that period.
Even though it would be inconceivable for the moratorium to stop all further economic development of Indonesia’s natural resource for a period of two years, in our analysis, we highlighted several important weakness of the Presidential Instruction (PI):
- The Indicative Map appears not to be consistent with the text of the PI; this creates uncertainty
- Up to 68 M ha of potentially high carbon stock secondary forest are excluded, and shallow peatlands and swamps (outside of primary forest) are also excluded, potentially leading to upstream degradation of hydrologically linked deeper peatlands (some of which are covered by the moratorium).
- Current Ministry of Forestry operations are excluded from the Map. Even if included there is no restriction on (i) the extension or, in some circumstances, expansion of current licences (potentially with high carbon stocks) to fibre plantations (with lower time-averaged carbon stocks).
- Within Non-Forest Lands, agro-industries such as oil palm can continue to develop primary forest and peat lands if they have already obtained a licence area (izin lokasi) even in situations where development has not yet begun. There will be no restriction on issuing new licences on secondary forests (up to 16 M ha in Non-Forest Lands) or on shallow peatlands and swamps whose management is required to avoid degradation of inter-connected deeper peat areas. Additionally, the rapid expansion of sugarcane envisaged for Papua may be able to move ahead unrestricted by the PI.
- The text of the PI, when combined with the Map, provides limited encouragement to Provincial and Regency spatial planners to move towards low carbon development plans.
However, there still remains much hope for achieving the objectives. The major determinants of land use in Indonesia – MoF, Provinces, and Regencies – and the powerhouse driving economic development – business – can take voluntary actions to help Indonesia achieve its stated aims.
The MoF could voluntarily enact further regulations restricting development within Forest Lands to reduce emissions and avoid clearance/drainage of high carbon stock lands for fibre plantations. This could be done by tightening existing regulations on how forest is utilised or entering into agreements with industry to shift existing but as yet undeveloped fibre plantations away from high carbon areas to low carbon areas within Forest Lands. The most effective way to achieve this reallocation of „degraded‟ lands is through modification of proposed sub-national land use plans, at either the provincial or regency level.
Through voluntary certification schemes or other commitments to progressive corporate policy, business leaders can, and do, avoid development of high carbon areas such as peatlands, primary forest and mature secondary forests. Uptake of such voluntary commitments is on the rise, but it is not yet the business norm. Whether or not low-emissions business plans are economically viable depends in part on voluntary or regulatory actions in consumer nations, as well as those in producer nations such as Indonesia. Until such a time that progressive, responsible business models become the norm, the impact of business will be limited. Market-based solutions will become the norm when barriers to entry are sufficiently low and potential rewards (or avoided risk of penalties) are sufficiently high. Efforts to create such enabling conditions should be vigorously pursued.
The analysis is also featured in Mongabay. This feature is a short version of the full analysis in English and has been translated into Indonesian language.
Unduh terjemahan Bahasa Indonesia.
Acknowledgments
The authors with to thank Neil Franklin and Deborah Lawrence for inputs on a previous draft, and Daemeter staff and colleagues for valuable contributions to the development of ideas presented in this report.
Disclosure
No financial support of any kind was offered by or accepted from third parties to prepare this report.
Recommended Citation
Wells, P.L. and G.D. Paoli (2011) An Analysis of Presidential Instruction No. 10, 2011: Moratorium on Granting of New Licenses and Improvement of Natural Primary Forest and Peatland Governance. Published by Daemeter Consulting, Bogor, Indonesia. (Available for download at www.daemeter.org)