15/08/2005JAKARTA (Associated Press) - Indonesia's proposal to build theworld's largest palm oil plantation along its border with Malaysia wouldhave a devastating impact on forests, wildlife and the local population,an environmental group warned Monday.

Indonesian in recent months has floated a plan to spend US$560 million(euro460 million) to develop the 214,000-hectare (528,794-acre) plantationon the island of Borneo. Financed by local and foreign investors includingthe Chinese, Indonesia says it would create 100,000 jobs.

The World Wildlife Fund said the area under consideration has some of therichest biodiversity in the world, supporting endangered species likeorangutans and pygmy elephants. Fourteen of 20 rivers on the island alsooriginate from this area, it said, and new species are being discovered ata rate of three per month.

"It doesn't make commercial or conservation sense to rip the forest out ofthe heart of Borneo to plant a crop that cannot grow in mountainousconditions," said Dr. Mubariq Ahmad, chief executive director ofWWF-Indonesia. "Such a project could have long-lasting, damagingconsequences for the people who depend on the area and its massive waterresources, which feed the whole island."

The proposal comes at a time when fires from palm oil plantations on theIndonesian island of Sumatra are spreading noxious haze to Malaysia,Brunei and southern Thailand. Plantation workers light the fires everyyear to clear land, an illegal practice that has been largely overlookedby the government.

Derom Bangun, chairman of the Indonesia Palm Oil Producers tradeassociation, said he supported the plan but called on the government toensure that "high-value forests" are protected.

"Investment should be encouraged provided the environmental considerationsare taken fully into consideration," Bangun said. "We're not onlyinterested in the economic aspects of the business."

Indonesia, the world's second-largest palm oil producer after Malaysia,produced 12.4 million tons of crude palm oil in 2004. The new project isexpected to boost the country's annual output by around 554,000 metrictons by 2011.

Since 2002, growers, producers, financiers and NGOs have signed a pactpromising not to destroy habitat that is home to endangered species orcrucial to a village's water supply, Bangun said. The agreement also callsfor each plantation to give back a portion of its earnings to nearbyvillages.

Source: Associated Press