25/11/2010 (Mongabay.com) - ndustrial interests are threatening to undermine Norway's billion dollar partnership with Indonesia, potentially turning the forest conservation deal into a scheme that subsidizes conversion of rainforests and peatlands for oil palm and pulp and paper plantations, logging concessions, and energy production, claims a new report from Greenpeace.

The report, Protection Money [PDF], argues that the forestry and energy sectors are working to influence Indonesia's national REDD strategy to continue on a business-as-usual expansion model.

"Expansion plans show that these sectors intend to utilize the Indonesian government's ambiguous definitions of forests and degraded land to hijack the funds and use them to subsidize ongoing conversion of natural forests to plantations," said Greenpeace in a statement.

The report cites data from "various ministries’ economic development plans" indicating that at least 63 million hectares of land are slated to be brought into industrial production by 2030, including 28 million ha of timber plantations; 9 million ha of estate crops, including oil palm; 13 million ha of forest land for agriculture; 9 million ha of biofuel plantations; and 4 million ha of mining concessions. The green group says the planned expansion—as currently designed—could lead to the loss of 40 percent of Indonesia’s remaining natural forest and degradation of 80 percent of its peatlands. The government aims to triple pulp and paper production by 2025 and more than double palm oil production by 2020, according to the report.

But Greenpeace says government figures also suggest the production goals can be achieved without further deforestation provided productivity improves.

”It’s clear that the palm and paper sectors can achieve expansion targets without damaging another hectare of forest. This would be a win for the industry and Indonesian economy, a win for forest communities and threatened species, and a model of the real-world solutions we need to tackle climate change,” said Bustar Maitar, Greenpeace Southeast Asia Forest Team Leader.

“President Susilo Bambang Yudhoyono has a progressive vision for low-carbon development, and the deal between Indonesia and Norway could set a fantastic example of how the developed and developing world can work together to protect natural forests, and tackle climate change."

The report says ensuring a low carbon development path will require meaningful definitions of what constitutes forest and degraded lands; greater transparency around land use and distribution of "REDD" funds; improved governance; a revised national land use plan; and a moratorium on conversion of natural forests and peatlands. Under the Norway pact, Indonesia has established a moratorium on new concessions in natural forests and peatlands beginning in January 2011, but Greenpeace says the moratorium must be extended to existing concessions on such lands in order to be effective.

Some of these measures put forth by Greenpeace are already incorporated into the reducing emissions from deforestation and degradation (REDD) agreement between Norway and Indonesia, which was signed in May. For its part, Norway says its funds will go toward establishing a system that will closely monitor all emissions associated with land use change, whether or not the land is classified by the government as "forest".

"Through the national system to monitor, report and verify emissions we will pay Indonesia based on actual results," Erik Solheim, Norway's Minister of the Environment and International Cooperation, told mongabay.com. "In this system, emissions caused by the conversion of natural forests and peatlands to other uses will be detected and reported, and will influence on the level of payments. Hence, the Norwegian-Indonesian partnership – and a future global REDD-regime - would reduce or eliminate the economic incentives for continued forest conversion."