Business

41m hectares of forests
still available for business
use

The two-year moratorium on forest and peatland conversions will not affect the development of new plantation areas because investors will still be permitted to open up new plantation areas, albeit in a special forest area, a forestry official said.

The Forestry Ministry secretary-general, Hadi Daryanto, said Tuesday that the government had allocated up to 41 million hectares as so-called special forest areas.

“Only 25 million hectares of forest areas have been used,” he told a discussion held by private television station Metro TV in Jakarta. He said that under the two-year moratorium, which would begin next year, the government would only halt conversions of primary forests and peatlands, not the productive forests allocated for businesses.

He claimed that there was still ample room for investments particularly in the renewable energy sector as many countries had stated their commitment to reduce fossil-fuel consumption and convert to using cleaner energy sources.

“Several energy companies, including Medco, has begun to develop renewable energy business such as wood pellet,” Hadi explained, adding that Indonesia’s natural resource potential would be the country’s competitive advantage in competing in the global market.

Indonesia agreed to impose the moratorium after it signed a letter of intent (LoI) with the Norwegian government in May this year. Under the LoI, Indonesia will receive US$1 billion, which will be disbursed once the moratorium is implemented.

Hadi said that factors disturbing Indonesia’s growth included poor infrastructure and unclear regulations on labor, not the moratorium. He added that the LoI with the Norwegian government had to be seen as an appreciation and acknowledgement of Indonesia’s commitment to preserve its rainforests.

Indonesian Young Entrepreneurs Association deputy chairman Silmi Karim, who also spoke at the discussion, said that the $1 billion compensation for Indonesia was not balanced with the economic potential the country could attain from its forests.

“It’s unfair,” Silmi said. “Developed countries have exploited their forests for hundreds of years and become wealthy, but now they pay us only $1 billion to stop making money from our own forests.”

He said that if the government insisted on imposing the moratorium, it should ensure that all regional governments across the country were well-informed about the content of the regulations, so the implementation would not hamper businesspeople.

“Currently, many regional governments haven’t understood on how to implement the moratorium. Such a condition will impede upon businesspeople from obtaining business permits to utilize forests,” he told the discussion.

The deputy minister for environmental damage control at the Environment Ministry, Masnellyarti Hilman, said that her ministry, together with the Forestry Ministry, had disseminated information on the moratorium to all related institutions at the regional level.

“We also have several supporting programs so the people don’t need to exploit forests any more,” she said.

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