Jakarta Globe, David Fogarty, December 05, 2012
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| A view of a drainage canal and cleared forest to plant palm oil on the boundary of the Rimba Raya Conservation project in the province of Central Kalimantan in this undated handout photo courtesy of InfiniteEARTH. (Reuters Photo) |
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Singapore.
Indonesia on Wednesday approved a rainforest conservation project that sets
aside an area roughly the size of Singapore and rewards investors with
tradeable carbon credits in the first of its kind to win formal backing in the
country.
Four years
in the making, the Rimba Raya Biodiversity Reserve will protect nearly 80,000
hectares (200,000 acres), much of it carbon-rich peat swamp forest at risk of
being felled for palm oil plantations.
Russian
energy giant Gazprom and German insurance firm Allianz are backers of the
project, the world’s first on deep peat.
A senior
Indonesian official announced the approval on the sidelines of UN climate talks
in Doha, Qatar. Forestry Minister Zulkifli Hasan signed a letter last week
saying the project had passed all the key steps. Reuters has seen a copy.
“We hope
projects like Rimba Raya will lead the way in proving that conservation can
address the rural development needs of the communities and also preserve our
forests for generations to come,” Hasan said in a statement.
Indonesia
has the world’s third-largest expanse of tropical forests but these are
disappearing quickly in the rush to grow more food and exploit timber and
mineral wealth. Forest clearance is a major source of greenhouse gases.
By saving
the forest and locking away planet-warming carbon, investors such as Gazprom
will receive carbon credits they can sell for profit or use to cut their own
emissions. Money from credit sales will also fund local livelihood projects.
The project
area, in Central Kalimantan province on Borneo island, is brimming with rare
animal species and adjoins a national park. It is designed to be a sanctuary
for endangered orangutans.
Rimba Raya
is part of a UN-led scheme called reducing emissions from deforestation and
degradation (REDD). The aim is to show forests can pay for themselves and
compete with powerful palm oil, mining and timber interests.
It
challenges Indonesia’s often poor conservation record and lax enforcement where
national parks are illegally logged. Palm oil firms have also been found guilty
of flouting laws and illegally clearing forest for plantations.
“This is a
small but significant step in terms of contributing to the government’s efforts
to reduce carbon emissions and showing that larger volumes of forest carbon
credits can be sold to credible buyers,” said Andrew Wardell, program director,
forests and governance, at the Center for International Forestry Research in
Indonesia.
But he said
REDD projects remain costly to develop and validate.
Over Rimba
Raya’s 30-year life, the project will generate about 104 million credits, each
representing a ton of carbon. In total, that equates to $390 million to $650
million based on current market rates for REDD carbon offsets.
Powerful
Friends
Hasan’s
comments mark a dramatic swing in Rimba Raya’s fortunes.
The project
initially met all the ministry of forestry milestones and look set for approval
in 2010. But it fell foul of opaque land use rules and pressure from a palm oil
firm.
After being
approved to cover 90,000 hectares, the project in early 2011 was slashed in
half, jeopardizing its viability. The ministry cited overlapping claims to the
land. The ministry also granted palm oil firm Best Agro International 9,000
hectares of land previously allotted to the Rimba Raya project.
A Reuters
special report last year on the project highlighted the ministry’s about-face
and the mismatch between the government’s green goals and the power of palm oil
firms.
After the
Reuters story, the project found powerful backers that eventually restored the
ministry’s support.
These
included Indonesian businessman Rusmin Widjaja, who stepped in as a white
knight to use his influence and financial backing. Singapore-based Widjaja
supplies flight simulators to the Indonesian military but also invests in
waste-to-energy projects. He recently told Reuters of his worries about the
rapid loss of Indonesia’s forests.
“Forests in
Indonesia need good governance, need clear rules and this project is a good for
Indonesia and the world. That’s why I wanted to save this project from
disarray,” he said.
Central
Kalimantan governor A. Teras Narang also offered critical support in letter
last month seen by Reuters.
Perhaps
most influential, though, is Triwatty Marciano, a special adviser to Rimba Raya
and wife of the Marciano Norman, the head of Indonesia’s State Intelligence
Agency.
Ibu Watty,
as she is known, helped resolve differences within the ministry and overcome
opposition from PT Best. In a July 2012 letter to the ministry approved by Best
President Director Winarto Tjajadi, and seen by Reuters, the firm effectively
renounced its claim to any overlapping concessions in return for replacement
land elsewhere.
For the
project developers, Americans Todd Lemons and Jim Procanik, it marks the end of
long and at times bitter process.
“Our
mistake was in assuming that the logic of REDD and Rimba Raya was
self-evident,” said Lemons, CEO of project development firm InfiniteEARTH.
Both men,
along with Gazprom, invested heavily in Rimba Raya to ensure it met the toughest
verification standards. Credits are expected to start to flow to Gazprom,
Allianz and other buyers in early 2013.
Reuters
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