Officials and activists in Indonesia are calling for the renewal of a ban on issuing new licenses for oil palm plantations, with the moratorium set to expire in September.
President Joko Widodo issued the moratorium in 2018, in response to widespread concerns about environmental violations, land conflicts and labor rights abuses within the palm oil industry. While no new oil palm concessions have been approved since then, concessions that were already permitted but not yet developed have been allowed to be cleared and planted.With less than a month left before the moratorium ends on Sept. 19, the government hasn’t announced whether or not it will extend it, although senior officials have called for it to remain in place.
“We’re evaluating [the moratorium],” Alue Dohong, the deputy minister of environment and forestry, said during a recent online press conference. “If it’s effective, then we continue [with it] because I think the size of our oil palm [plantations] is already vast. It’s better to increase the productivity of our palm oil” than the total plantation area, he added.
Indonesia is the world’s biggest producer of palm oil, a product used in a wide range of everyday products, from shampoo and soap, to lipstick, bread and margarine. It’s the world’s most consumed vegetable oil, and the most productive, yielding up to 10 times more oil per hectare than soybeans. But in Indonesia, much of that production has come at the expense of rainforests, peatlands and Indigenous and community lands, cleared to make way for vast industrial plantations.
Alue said the sustainability aspect of the moratorium contributes to Indonesia’s goal of reducing greenhouse gas emissions. Unlike most other major emitters, where electricity generation and transportation account for the majority of emissions, Indonesia’s leading source of emissions is deforestation and land-use change.
The environment ministry has set a target of turning Indonesia’s forests into a net carbon sink by 2030 through various means, such as slowing down deforestation and planting more trees.
“So it’s relevant to continue the moratorium to achieve the target of net sink by 2030,” Alue said.
The office of the chief economics minister says the government is still evaluating the effectiveness of the moratorium. The minister’s deputy for agriculture, Musdhalifah Machmud, said the moratorium had brought some benefits, including a reduction in GHG emissions and increased productivity per hectare of plantation.
But there’s no decision either way just yet on the future of the moratorium, she added. “We report the progress [of the policy] and the [president] will consider whether to extend [the moratorium] or not,” Musdhalifah said as quoted by local media.
Not extending the moratorium will have dire consequences for Indonesia’s remaining rainforests, environmentalists say.
Data from Madani, an environmental NGO, show that there were 3.58 million hectares (8.85 million acres) of natural forests — an area larger than Belgium — that had already been licensed by the government for plantations as of 2019.
“The implementation of the palm oil moratorium gives hope that the natural forests still inside palm oil concessions will be evaluated and be reinstated to forest areas,” said Trias Fetra, the program officer for palm oil management at Madani.
Another 5.7 million hectares (14.1 million acres) of natural forests are earmarked for industrial activities, which means they’re eligible to be licensed out for plantations in the future, Trias added. These areas are known as convertible production forest, or HPK.
Madani also identified 3.8 million hectares (9.39 million acres) of carbon-rich peatlands inside oil palm concessions.
These forests and ecosystems stand to disappear if there’s no moratorium in place to curb the expansion of oil palm plantations into forested areas and protect natural forests already licensed for plantations, Trias said.
“If the palm oil moratorium isn’t extended and strengthened, the deforestation rate will ramp up again and Indonesia will be at risk of failing to meet its climate commitment,” he said. “By saving the 3.8 million hectares of peatlands [from deforestation], we can prevent the release of 11.5 million tons of CO2 per year due to burning and land conversion, which of course would contribute to Indonesia’s climate commitments.”
Work left to do
Renewing the moratorium is also important because there’s still a long list of problems that haven’t been addressed by the current policy, according to Agung Ady Setyawan, a campaigner with the NGO Forest Watch Indonesia (FWI).
“The government and stakeholders have to realize that the indicator of success is not solely zero issuance of new permits during the moratorium period,” he said. “It also has to solve the problems of productivity, market acceptance, deforestation, legal certainty for palm oil farmers, overlapping [permits] and land conflicts.”
One of the persistent problems in the industry is the prevalence of illegal plantations, which the moratorium doesn’t address. Indonesian law prohibits oil palm plantations from being established inside areas designated as forest, but many operate this way.
The environment ministry has identified 3.37 million hectares (8.33 million acres) of such illegal oil palm plantations throughout the country, amounting to an area the size of the Netherlands.
More than a fifth of this illegal plantation area will soon be legalized, as the operators are applying for a change in the designation of the forest. This will still leave 2.61 million hectares (6.45 million acres) of illegal plantations.
Arie Rompas, head of the forest campaign team at Greenpeace Indonesia, said revoking licenses alone isn’t enough.
“The future palm oil moratorium policy should be able to work as a corrective action to solve oil palm [plantations] inside forest areas,” he said. “One of them is to return all remaining forest cover inside concessions as forest area or to be determined as high conservation value [HCV] or as customary forest.”
Ruandha Agung Sugardiman, the environment ministry’s chief of planning, said the government is currently working to address this issue using the so-called omnibus law on job creation.
The controversial legislation, passed amid widespread protests last year, comprises a sweeping slate of deregulation across a range of industries, including rolling back environmental protections and incentivizing extractive industries such as mining and plantations.
One of the omnibus law’s key concessions to the palm oil industry is to effectively legalize plantations inside forest areas by giving plantation operators a grace period of three years to obtain the proper permits. This includes the degazetting of the forest designation and paying the requisite fines, allowing them to resume their operations.
“There are already steps to solve oil palm [plantations] inside forest areas [laid out] in the omnibus law and the government regulations,” Ruandha said.
Lawmakers, however, have criticized the mechanism to deal with these illegal plantations, calling it a form of “whitewashing.”
Industry operating under opacity
The moratorium also hasn’t addressed the lack of transparency plaguing the palm oil industry.
The government has repeatedly refused to make public plantation data and maps, known as HGUs, citing reasons ranging from corporate secrecy to anti-competitive practices to national security. This has cast doubt on its commitment to improving the sustainability and transparency of the industry.
Three years after the moratorium was first enacted, plantation data and maps are still elusive. Even data relating to the implementation of the moratorium itself are hard, if not impossible, to access by the public.
Raynaldo Sembiring, executive director of the Indonesian Center for Environmental Law (ICEL), pointed out that the government is required to produce a report on the progress of the moratorium every six months and submit it to the president. He said the public should be allowed to access the report so that it can monitor the implementation of the policy and hold the government accountable.
“During these [past] three years, we only received PowerPoint presentations from the relevant ministries or institutions regarding what they’ve done [to implement the moratorium],” Raynaldo said. “That’s it.”
Another issue that NGOs highlight is the need for better implementation of the moratorium by local governments. The governments of 19 provinces and 239 districts that are home to oil palm plantations have still not acted on the policy, according to data from the NGO Sawit Watch.
Others have done better, even carrying out a review of existing plantations to assess whether their permits were issued in violation of the rules. In West Papua province, on the island of New Guinea, the local government teamed up with the national anti-corruption agency, the KPK, and the NGO EcoNusa to carry out a review of palm licenses there.
The audit identified 383,431 hectares (947,479 acres) — an area two and a half times the size of London — of intact forest that sits inside areas earmarked for oil palm plantations. This area remains untouched because of a litany of administrative and legal violations by the companies that prevents them from clearing the forest and starting to cultivate oil palms.
Following the review, the government rescinded permits for 14 concessions in five districts in the province, spanning a combined 267,857 hectares (661,889 acres).
The Kutai Kartanegara district government in East Kalimantan province, on the island of Borneo, carried out a similar initiative in 2019, which resulted in the recommendation of the revocation of eight permits. Other local governments, like that of Sanggau district in West Kalimantan province, and Gorontalo district, on the island of Sulawesi, are also issuing decrees to follow up on the moratorium policy.
The district government of Buol in Sulawesi also issued in 2019 a regulation mandating a freeze on the issuance of new licenses as well as the establishment of a team to audit existing permits. A similar freeze and audit is now being done by the government of Papua province.
In Riau province, Sumatra, the government set up a team to crack down on the nearly 1.4 million hectares (3.5 million acres) of illegal plantations in forest areas.
Yet despite these local initiatives, it’s unclear whether the central government is carrying out a nationwide review of licenses, which is an integral part of the moratorium policy. Raynaldo of ICEL said the government still hasn’t defined baseline data or published permit details that would be essential to measuring progress.
“If it can be mentioned how many permits that are being reviewed, revoked and even the size of forest area that’s remaining [because of the moratorium], the result will be clearer,” he said, adding this is why greater openness of data is important.
Gunning for global acceptance
Renewing the moratorium would not just have the benefit of allowing overlooked or unfinished issues to be addressed, say activists from a coalition of NGOs.
Together with improving the sustainability of Indonesia’s plantation industry, it will make the country’s palm oil more attractive in the global market, according to Inda Fatinaware, executive director of Sawit Watch, a member of the coalition.
Less than a fifth of Indonesia’s crude palm oil production that’s traded globally, 19%, is certified sustainable. Global demand for certified palm oil is expected to grow, meaning there’s a huge market for sustainably sourced palm oil, the coalition says.
“But this strategic opportunity will be gone if this [moratorium] policy is not extended,” said Ramadha, a palm oil campaigner at Kaoem Telapak, one of the NGOs in the coalition. “Problems like permit review and social conflicts that haven’t been solved will create negative sentiment in the global market.”