1/12/05 Jakarta (The Jakarta Post) - Apart from potential losses due to environmental destruction, the planned 1.8 million hectares of oil palm plantations in Kalimantan will cause the state financial losses of Rp 237.8 trillion (US$23.69 billion), an environmental group warns.

A study by non-governmental organization Greenomics shows that the economic value of timber from both natural and production forests in the area amounts to Rp 212.9 trillion and Rp 24.8 trillion, respectively.

The NGO implied that there might be an "additional economical motive" in the plan -- in the form of timber acquired during land clearance -- aside from yields from investments made on the planned plantation.

The analysis came from estimating the economic value of more than 16.9 million cubic meters of timber with a diameter of 50 centimeters and some 37.6 million m3 of 20-cm-diameter logs found in production forests.

The estimation also took into account 115 million m3 of 50-cm-diameter logs as well as 403 million m3 of 20-cm-diameter logs in natural forests.

"Investors will be the ones to benefit from the clearance of the forests, which is to make way for the plantations," Greenomics executive director Elfian Effendi said on Wednesday.

According to documents from the consortium of state-owned plantation companies PT Perkebunan Nusantara No. I to XIV obtained by Greenomics, the government plans to set up a 1.8 million hectare oil palm plantation along the border of Kalimantan and Malaysia. The project was among those offered to Chinese investors during President Susilo Bambang Yudhoyono's visit to China in July.

One million hectares of the plantation will be funded by China and is located in West Kalimantan, while the remaining 800,000 hectares are in East Kalimantan.

The total area of the plantations will be worth some $8 billion in investment.

Greenomics earlier estimated the long-term potential losses at about Rp 27 trillion annually due to environmental degradation.

"We recommend only the clearance of some 23,716 hectares of production forest but none of the natural forest," Elfian said, adding that revitalizing abandoned land could be an alternative.

Of the 2.3 million hectares of plantation areas in West Kalimantan at present, some 1.5 million hectares have been abandoned.

"We hope that the Ministry of Forestry remains consistent with its stance of not allowing the conversion of natural forest," he added.

A letter from Minister of Forestry M.S. Kaban addressed to the Ministry of Agriculture dated Aug. 16 states that clearance of natural forests to make way for oil palm plantations would violate Law No. 5/1990 on natural resources and ecosystem conservation.

"We do not want another precedent, similar to the government's policy to allow open mining in conservation areas, to happen again," Elfian said.