Balancing energy development and forest protection

Published in COAL ASIA MAGAZINE, VOL. 2, OPINION, AUGUST 17-SEPTEMBER 17, 2012, PAGE 94-95

by Fitrian Ardiansyah

To see the pdf version, please click COALASIA_OPINION_fitrian ardiansyah_energy&forest_Aug2012

As the largest energy producer and consumer in Southeast Asia, Indonesia is currently struggling to cope with the increase in energy demand each year, causing short-term energy shortage and likely leading to worse situation if no immediate actions taken.

Albeit having enormous energy potential, developing energy sources in this country, while desirable, is fraught with hurdles, ranging from regulatory and pricing issues, lack of capacity and investment, to the problematic location of energy sources.

The heavy reliance on subsidized fossil fuels means it has brought about significant problems of energy security and economic issues, especially ever since Indonesia became a net importer of both crude oil and refined products in 2004.

The new extraction of oil, gas and coal as well as the development of new and renewable energy sources has been viewed as a priority by the government but this development faces a number of challenges, such as the fact that some locations of these energy sources overlap with Indonesia’s remaining important and fragile ecosystems, including its forests.

It has been reported by the Forestry Ministry in 2011 that the area of forests within mining concessions, which include for oil, gas and coal activities, covers approximately 2.03 million hectares – based on 842 licenses given for mining related exploration and exploitation between 2005 and 2011.

A number of environmental organizations, such as Mining Watch Canada and Walhi, even claimed a higher number stating that as of 2005, mining activities have encroached on or threatened 11.4 million hectares of forest in Indonesia, including 8.68 million hectares of protection forests and 2.8 million hectares of conservation areas.

A 2008 study conducted in South Kalimantan by M. Handry Imansyah and Luthfy Fatah of Lambung Mangkurat University, published in ASEAN Economic Bulletin, found that a massive coal exploitation without a proper technical handling for reclamation can cause serious water contamination and land degradation, because many mining areas are often left without rehabilitation.

A similar concern may also be said when it comes to the development of renewable energy, namely biofuels and geothermal.

In the case of biofuels development, mainly from palm oil, although considered as one of renewable sources of energy and therefore has the greenhouse gas (GHG) saving potentials, the development of these crops can further increase GHG emissions if the plantation replace forests and peat lands.

A 2011 article written by Gayathri Vaidyanathan in Nature shows that, for example, in North Sumatra and Bengkulu provinces, 38 and 35 percent, respectively, of peat-swamp forest were converted to oil palm plantations by the early 2000s – leading to the release of about 144.6 million tons of carbon from biomass above ground and peat oxidation below ground.

Another study conducted by Lian Pin Koh and David S. Wilcove in 2008, published in Conservation Letters,estimates that over 56 percent of oil palm expansion occurred at the expense of natural forest cover for the period between 1990 and 2005. In addition, according to the 2009 BAPPENAS (National Development Planning Agency) report, as of 2006, plantation licenses (i.e. predominantly for oil palm) on peatlands totalled 1.3 million ha.

With regard to geothermal energy, this type of renewables has a significant potential to contribute to the future electricity generating capability – with 10 gigawatts of total geothermal potential that is presently ready for commercial extraction as reported in 2009 by the World Bank.

If developed appropriately and immediately, geothermal energy can at least reduce the burden of approximately 35 percent of the current total generation capacity in 2035, as argued in a 2012 paper written by a research team from the Christian University of Indonesia, and eventually contribute to climate change mitigation.

Accelerating the development of geothermal energy is likely to be challenging since up to 60 percent of its potentials and reserves are located in the remaining important forest areas, according to a 2009 paper written by Montty Girianna, the Energy, Mineral and Mining Resources Director of Bappenas.

The exploration, extraction and overall activities of oil, gas, coal and geothermal have been previously subjected to the laws regulating the protection and management of pristine forests, including employing stricter conditions under which licenses are to be issued.

A 2011 report by PricewaterhouseCoopers explains that the Forestry Law No. 41 of 1999 (and its amendments No. 1 of 2004 and 19 of 2004) prohibit oil, gas and mining activities in protected forest areas except where a government permit is obtained.

This, however, was gradually altered, particulary since February 2010 when Government Regulation No. 10 of 2010 on Forest Areas Utilization was introduced. According to this regulation, development projects, including oil and gas activities, power plants, mining, transport and renewable energy projects, can take place in protected forests if they are deemed strategically important.

Specifically on geothermal, a presidential decree (No. 28 of 2011) released on 19 May 2011, allows conditional underground mining in protected forest areas, which includes geothermal energy. This decree was later strengthened with the release of the Memorandum of Understanding between the Energy and Mineral Resources Ministry and the Forestry Ministry (No. 7662 of 2011) aiming at accelerating the permit issuance of geothermal energy development in forest areas.

Critics, however, view that these regulations and policies which promote and accelerate energy development in forest areas will also encourage other destructive mining activities to take place since the use of the definition of ‘strategic’ or ‘vital’ development activities can have multiple interpretation.

Furthermore, these critics question the level of seriousness of the Indonesian president’s pledge to reduce Indonesia’s GHG, if many of his government’s policies still incorporate a large number of activities that will lead to deforestation in primary and secondary forests as well as peatlands.

It is, therefore, imperative for Indonesia to find practical and applied solutions to balance energy development and forest protection.

The balanced development of energy and forest protection is also crucial since the pledge made by Indonesia’s President particularly mentioning his commitment to changing the status of Indonesia’s forests from a net-emitter sector to a net-sink sector by 2030 and more specifically, emphasizing the preservation of areas under forest protection as one of key programs.

One immediate step to do this, for example, is by harmonizing and synergizing different regulations and policies that will result in a clearer guidance from the government. Vague words like ‘vital’ or ‘strategic’ development activities need to be clarified so that these will not be used as a loop hole.

Synergyzed policies will not be implementable if data regarding conventional energy sources, renewables and forest areas are not synergized as well. Recent actions taken by a number of government’s institutions to synchronize and agree on a map of forest and land use in Indonesia – adhered to across all sectors and levels of government – are therefore crucial to contribute to balancing energy development and forest protection.

Following these steps, a set of sustainability benchmarks is deemed urgent to be instituted to provide technical directions to mitigate the impacts and risks of energy development on forests.

The sustainability benchmarking – promoting principles of high conservation value forest, effective environmental assessment, management plans and monitoring, and multi-stakeholders participation – is required because not only the actual environmental impacts have to be mitigated but also the perceived risks coming from energy projects on these ecosystems need to be addressed, in which local communities and the public may have substantial interest.

The development and implementation of these benchmarks will also align with other laws regulating forest and biodiversity protection, namely the 2009 Forestry Law, the 1990 Biodiversity Conservation Law and the 2009 Environmental Protection and Management Law.

As an emerging economy with a significant increase in energy demand, supplying energy while reducing environmental impacts is definitely a balancing act.

Finding solutions, as elaborated above, is hence urgently required and if these solutions are applied appropriately, Indonesia is likely to secure its future energy in a sustainable way.

——

Fitrian Ardiansyah

The writer is climate and sustainability specialist, a doctoral candidate at the Australian National University, and the recipient of Australian Leadership Award and Allison Sudradjat Award. He can be reached at fitrian.ardiansyah@anu.edu.au

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The HCVF Application in Indonesia

Indonesia has some of the most biodiverse rainforests in the world, but also the highest deforestation rate. The HCVF (high conservation value forest) concept has taken hold in Indonesia as a means of reconciling economic pressures to open up forest areas with the need to reduce the rate of forest loss.

Several NGOs have actively encouraged the use of the concept, integrating HCVF within their ongoing work on conservation, sustainable forestry and land use management, in collaboration with government ministries, the private sector and local communities. The urgent objective of applying the concept, as far as many are concerned, is to help pre-empt forest conversion and the loss of biodiversity and social values that accompanies it.

HCVF assessment represents an embryonic concept introduced and promoted by the Forest Stewardship Council (FSC) – originally intended for site specific Forest Management Units (FMUs) – and now adopted further such as by the Round Table on Sustainable Palm Oil (RSPO). The basic premise is that all forested areas possess biological, environmental and social values with identifiable conservation attributes.

If these attributes are identified, then management should ensure maintenance and/or enhancement of High Conservation Values (HCV) described by these conservation attributes. The Indonesian HCVF toolkit was the first national version to be produced, in 2003, and various arms of government are currently studying how HCVF can fit into existing government policies and planning processes. If this integration of HCVF into government policy goes ahead, it will help to align government land-use decisions with demands from international markets for ‘HCVF-free’ paper products and sustainably-produced palm oil.

To date, HCVF work in Indonesia has included a considerable number of HCVF assessments at the concession level by pulp, palm oil and timber companies, including more than a dozen in Sumatra and a handful in Kalimantan. WWF (in Sumatra, Kalimantan and Papua), The Nature Conservancy (in East Kalimantan), Tropenbos (East Kalimantan), Flora and Fauna International (West Kalimantan) and Sumatran Orangutan Conservation Programme (North Sumatra & Aceh) have been working with companies and local governments to designate, manage and monitor HCVFs within plantations and logging concessions.

Several landscape-level HCVF assessments have also been undertaken in, for example:

– The Trans-fly region of southern part of Papua Province, where the HCVF assessment identified priority conservation areas and important indigenous social/cultural areas, and helped WWF to influence local government to incorporate this in its planning process;

– Riau Province, Sumatra, where the coarse-scale HCVF assessment provided the basis for negotiation to secure the conservation of the few remaining large intact forest blocks such as the Tesso Nilo Forest complex;

– West Kalimantan Province, Kalimantan, where HCVF assessment provided the arguments for WWF and other NGOs to sustain remaining forest areas and protect the ‘Heart of Borneo’.

The HCVF landscape analysis is predominantly approached through the generation of maps and spatial analysis. In Papua and West Kalimantan cases, the HCVF landscape level assessments have been strengthened by the efforts to acknowledge and incorporate social and cultural values. This part of assessment was undertaken through a series of consultative meetings and a workshop with social experts and representatives of indigenous communities.

In the case of timber plantations, WWF has been urging pulp and paper companies APP and APRIL to protect the HCVFs in their concessions in Riau, Sumatra. In response, APP appeared to commit to protecting the HCVF found in one of its concessions and commissioned Smartwood to map HCVFs in three of its other FMUs in the area. On the basis of this mapping, APP announced that it would protect the HCVFs identified and signed an agreement with Smartwood to track how well it is managing its HCVFs over the next five years. However, recent monitoring reports have shown that APP has failed to protect these areas from fires, illegal logging and further forest conversion, despite its earlier pledges.

For its part, APRIL conducted its own HCVF assessments in several of its FMUs, with support from local and international experts. APRIL also commissioned Proforest to conduct additional HCVF assessments. Furthermore, the company pledged it would not convert any HCVFs, as identified through application of the Indonesian toolkit, in any of its new concessions and would not source wood from HCVFs anywhere in the world for any of its mills. However, in April 2006, an investigation found that natural forest in a concession associated with APRIL was being logged, causing disturbance to elephant habitat.

In oil palm concessions, three of Indonesia’s major palm oil producers, PT SMART Tbk., PT Astra Agro Lestari Tbk. and PT. London Sumatra Tbk. have signed Memoranda of Understanding with WWF to undertake pilot HCVF assessments with WWF in some of their concessions. Both companies have agreed to implement the protection and management prescriptions identified in the HCVF work, and to apply the lessons learned in their other concessions throughout Indonesia. The companies hope to apply the lessons-learned from this pilot to their other concessions. However, the effectiveness of HCVF application in this sector is yet to be seen.

The overall HCVF application in Indonesia still raises several key challenges, which include:

– The first version of Indonesia HCVF toolkit was developed by a relatively small group of interested practitioners and experts. Since then, much experience in HCVF assessment has been gained and many more stakeholders have become involved. The challenge now is to involve a wider group of stakeholders in a process to strengthen the toolkit based on this experience, including stronger social/cultural analysis and lessons-learned from the oil palm experience;

– The results of HCVF assessment at landscape and provincial-wide levels need to be further used to influence government’s land use and development planning – for instance, by being gazetted in the provincial and/or district spatial planning;

– The cases with pulp and paper and oil palm companies highlight the need for active stewardship of HCVFs if company commitments are to make a real difference in practice.

Article compiled and re-written by Fitrian Ardiansyah, WWF-Indonesia (fardiansyah@wwf.or.id) based on several articles on HCVF written by WWF-International and WWF-Indonesia

Source: WRM’s bulletin Nº 114, January 2006, http://www.wrm.org.uy/bulletin/114/Indonesia.html

Impact assessment on oil palm development

By Dr Asril Darussamin (Indonesian Palm Oil Commission), Fitrian Ardiansyah and Suhandri (WWF-Indonesia)

This paper is presented at the 2nd Roundtable Meeting on Sustainable Palm Oil, 6 October 2004, Jakarta.

Original link: http://www.rspo.org/files/pdf/RT2/Presentations/Impact%20Assessment%20on%20Oil%20Palm%20Development%20(IPOC%20&%20WWF).pdf

Please read the full paper here: Impact Assessment on Oil Palm Development (IPOC & WWF)

Summary:

As one of the leading representatives of the palm oil industry in Indonesia and a non-structural organisation under the Ministry of Agriculture, Komisi Minyak Sawit Indonesia (The Indonesian Palm Oil Commission or IPOC) saw the needs to deal with sustainable palm oil issues directly and was willing to find appropriate solutions for the problems. The aim of the organisation was to provide clear information, steps and guidelines, to its members (mostly industry players) and decision makers from the government, on the way to move forwards in implementing better management practices based on appropriate consideration of environmental and social aspects. The first step taken was to conduct a study that identifies the interaction and impacts of oil palm plantations on the environment. This study or assessment intended to obtain clear and sufficient knowledge on environmental issues relating to oil palm plantations including the conversion of HCVF and the loss of wildlife habitat. The next step was to find and formulate ‘best solutions’ that combine both interests of business and the environment. This kind of solutions hopefully will positively change the practices and image of the Indonesian palm oil industry. In taking these two steps, IPOC reaches out WWF-Indonesia for collaboration and assistance. In April 2004, an MoU basing the collaboration between these two organisations was signed by Dr. Delima Azahari (Chief of IPOC) and Dr. Mubariq Ahmad (Executive Director of WWF-Indonesia).

The overall objectives of this impact assessment were to acquire clear and sufficient data on the positive and negative impacts of oil palm plantations on forests and biodiversity in Indonesia and to find appropriate
solutions of the problems. These solutions would act as a starting point in showing the responsibilities of Indonesian palm oil industry and changing the practices and image of the industry. The specific objectives of this assessment were to identify and learn the impacts and interaction of oil palm plantations in Riau and West Kalimantan provinces on High Conservation Value Forest (HCVF) – inside and in the surrounding plantations – and to understand actions that have been or need to be taken to maintain or improve the quality of the HCVF. The findings would also be used to recommend any adjustments on existing sustainable palm oil criteria (including the one that is being developed by Proforest for RSPO/Roundtable on Sustainable Palm Oil).