Moratorium will not hinder investment: Forestry Ministry

A two-year moratorium on forest and peatland clearing, which will come into affect next year, will not hinder investment in the forestry sector because the government has allocated 41 million hectares of forest to businesses, an official says.

Of the 41 million hectares of forest available to businesses, only 40 percent or 25 million hectares had been utilized so far, Forestry Ministry secretary-general Hadi Daryanto said Tuesday.

“We will only halt the conversion of primary forest and peatlands, not production forests allocated for business,” he told a discussion organized by the private television station Metro TV in Jakarta.

Hadi said there was ample room for investment, particularly in the renewable energy sector, as many developed and emerging market countries had stated commitments to reduce fossil fuel use and convert to cleaner energy sources.

“Several energy companies, including Medco, have started to develop renewable energy business including wood pellets,” Hadi said, adding that Indonesia’s natural resource potential could give Indonesia a competitive advantage in the global market.

Indonesia agreed to impose the moratorium after signing a letter of intent (LoI) with the Norwegian government in May this year. Under the LoI, Indonesia will receive $US1 billion, which will be disbursed once the moratorium is implemented.