05/02/2009 (Mongabay) - The World Resources Institute (WRI) has launched an innovative avoided deforestation model that aims to deter conversion of Indonesian rainforest for oil palm plantations.

The project, dubbed "POTICO" (Palm Oil, TImber, Carbon Offsets), integrates sustainable palm oil, FSC-certified timber, and carbon offsets in order to "divert new oil palm plantations onto degraded lands and bring the forests that were slated for conversion into certified sustainable forestry".

WRI says POTICO would allow the palm oil industry to expand without destroying tropical forests. The implications for forest conservation are tremendous — oil palm development is presently one of the leading drivers of deforestation in Indonesia and Malaysia.

While tens of millions of hectares of degraded land is suitable for oil palm development in Indonesia, plantations are often established on forest land for two reasons: a 'logging subsidy' generated by the sales of timber and concession arrangements with governments that avoid claims arising when land has already been 'used' for a prior purpose. WRI says POTICO will provide an alternative model for the oil palm industry that will enable it to truly become more sustainable.

"POTICO's main goal is to divert new oil palm plantations away from forests, onto degraded areas. This would ensure that oil palm plantations could keep expanding to meet demand—generating local revenues and jobs—while halting the destruction of forests," said WRI in a statement.

"POTICO aims to demonstrate that it is possible to pay for this 'more expensive' way to develop new plantations by developing a combination of different revenue streams. This will circumvent the perverse economic incentive to clear virgin forests when establishing oil palm plantations."

WRI hopes to convert 1.25 million acres of degraded land into oil palm plantations, but the environmental group notes that POTICO would work with local communities to resolve conflicts over such lands.

"It is important to note that degraded lands in Indonesia are usually not empty," said WRI. "These lands are often used by local communities.

"Any new developments by companies on those lands would need free, prior and informed consent from the communities. Under POTICO, WRI will work with communities and the companies to meet the highest standards of free, prior and informed consent."

Jonathan Lash, president of WRI, says POTICO will help Indonesia curtail greenhouse gas emissions resulting from deforestation. Indonesia is presently the world's third largest emitter of carbon dioxide.

"Deforestation is having a significant impact on people, biodiversity and the climate," said Lash. "Project POTICO will relieve pressure on Indonesia's virgin tropical rainforests, reduce greenhouse gas emissions from forest clearing, and prevent the loss of biodiversity in forests slated for conversion to oil palm plantations. Well-designed oil palm plantations in degraded areas would create local jobs and protect traditional livelihoods of forest-dependent people."

NewPage, a forest products company that has partnered with WRI on POTICO, says that the initiative may help rein in illegal logging. Indonesia is one of the world's biggest sources of illicit timber.

"Project POTICO, in combination with the U.S. Lacey Act, will help level the global playing field by minimizing illegal logging and reducing the amount of product brought into the United States that is produced in violation of the law," said Rick Willett, president and chief operating officer for NewPage, noting that recent amendments to the Lacey Act now make it illegal to import into the U.S. wood or paper derived from illegally harvested trees. "We are making an investment in this project because we strongly believe that major improvements must be made globally in the area of sustainable forest management."

Forest products will be produced on lands currently slated to be converted for oil palm plantations. The trees will be left standing "as protected forest or will be sustainably managed to supply Forest Stewardship Council-certified wood or fiber for use in paper products", according to WRI.

Sekala, an Indonesia-based NGO, is also a partner in POTICO. Sekala will provide spatial analysis and community mapping.