Saturday, 29 May 2010

Palm oil industry safe from forest moratorium

Palm oil industry safe from forest moratorium

Aditya Suharmoko, The Jakarta Post, Oslo Sat, 05/29/2010

Existing palm oil contracts will be exempt from a two-year moratorium on new concessions to clear the nation’s natural forests and peatlands, says President Susilo Bambang Yudhoyono.

In a historic agreement with Norway, Indonesia pledged to support a two-year moratorium on new concessions that permit conversion of virgin forests and peatlands into plantations.

In exchange, Indonesia will receive a US$1 billion grant from Norway to reduce deforestation in the country.

Indonesia is also required to establish a special team to oversee the disbursement of the fund.
The moratorium has raised questions about the expansion of palm oil businesses in Indonesia, which, together with Malaysia, account for almost 90 percent of the world’s palm oil production.

Yudhoyono said palm oil plantation companies could continue their businesses in Indonesia.
“We have a policy to use degraded land ... for the continuation of the palm oil industry in Indonesia,” he said in a joint press conference with Norway’s Prime Minister Jens Stoltenberg at Holmenkollen Park Hotel Rica during the Oslo Climate and Forest Conference.

Yudhoyono said he would ensure that the palm oil industry could continue business-as-usual while the nation’s forests would be protected.

“[There is] degraded land that can be utilized for agriculture, including palm oil,” the President said.

The countries involved pledged to provide US$4 billion between 2010 and 2012 to preserve the world’s forests.

That amount reflects an increase from $3.5 billion originally pledged in Copenhagen in December 2010, Stoltenberg said during the conference.

“There was [also] a new commitment from Denmark during this meeting,” Stoltenberg said. He did not provide a specific figure for the commitment.

Germany also pledged 350 million euros ($371 million) to support the commitment, said Stoltenberg. Other major contributors included the US, Norway, France, the United Kingdom and Japan, he added.

He said the money would come from the Norwegian government’s budget, but he expected that the private sector could contribute up to $30 million by 2012.

Developed countries’ large budget deficits after the 2008 global financial crisis and the current euro debt crisis would limit public sector contributions, he said.

However, businessmen such as financier George Soros and Microsoft founder Bill Gates had expressed interest in contributing, said Stoltenberg.

“There is no way to get the money without mobilizing the private sector, ” he said.
Money might also be mobilized by other means, including carbon pricing, carbon taxes, emissions trading and charges on air tickets and maritime transportation, he added.
Yudhoyono said Indonesia expected to reduce emissions by 26 percent in 2020 with its own resources, or by 41 percent with international support.

The President and his entourage arrived in Oslo on Wednesday. He left Norway on Friday and is scheduled to arrive in Jakarta on Saturday morning.