Is Indonesia's Program to Stop Deforestation in Meltdown?

Indonesia at a Crossroads

Back in December, I wrote an article for Mother Jones about Indonesia's efforts to reduce its levels of deforestation and, by extension, its greenhouse gas emissions, which are the third highest in the world, trailing only the U.S. and China. This endeavor is part of a U.N. scheme called REDD — Reducing Emissions from Deforestation and Degradation — that aims to funnel billions of dollars of rich country aid to developing ones, like Indonesia, Guyana, and Brazil, that cut down millions of acres of trees a year. In exchange for aid, these countries ween their economies away from forest resource extraction.

By way of the small town of Sungai Tohor, which is located in Sumatra, I showed how Indonesia is at crossroads. On one hand, it is set to receive billions of dollars from Norway and the U.S., among other countries, in exchange for imposing a moratorium on the issuance of logging permits and setting up a system for monitoring, verifying, and reporting activities in its forestry sector. On the other hand, Indonesia's government has been inextricably linked for decades to the logging industry and in more recent times palm oil and pulp/paper producers. Corruption is rampant. How could Indonesia turn all this around and go from being an enabler of forest destruction to a steward of the forests.

The Norway Deal and the Moratorium Delay

Since December, Indonesia has clearly not turned the corner on deforestation. Implementation of its REDD program has lagged, corruption continues to cast a dark shadow over the forestry sector, and communities like Sungai Tohor remain threatened by expanding mono-crop plantations of oil palm and acacia trees, which are used to make paper.

In exchange for a billion dollars in Norwegian aid, Indonesia was meant to impose a two-year moratorium on the issuance of new logging permits. The moratorium was set to take effect at the beginning of 2011. Yet, nearly five months later there is no moratorium in place and various government agencies are split on how to interpret what types of forests should be protected.

The central hang-up within the Indonesian government is whether or not industrial-scale plantations should be allowed on lands that have been partially degraded. The Indonesia government wants to boost oil palm and acacia production in order to increase GDP while at the same time reducing deforestation of natural rainforests and carbon-rich peat soils.

Corruption and Governance Failures

Corruption within the forestry sector has been rampant. An Ernst and Young audit found that during the 1990s over $5 billion from a national reforestation fund could not be accounted for by the Ministry of Forestry.

A new report highlights how certain recommendations could lead to Indonesia implementing a REDD program that does little, if anything, to reduce amounts of deforestation. There are billions of dollars at stake in Indonesia's REDD program alone.

The governance challenge is not merely one of individual corrupt officials but of systemic arrangements in which the forestry sector has historically been used to generate rents for political purposes. Reforming these arrangements requires sustained political will at the highest levels of government, as well as institutional changes that alter the incentives facing officials, concession holders, and local governments throughout the forestry system.

Communities at Risk

And what of Sungai Tohor? The logging has stopped for now as the community continues to advocate for a government-imposed halt to logging.

The temporary reprieve for communities like Sungai Tohor underscores the precariousness of their situation. Without formal legal recognition of their territorial rights and without a binding moratorium in place, communities cannot be certain that the forests that sustain their livelihoods will not be allocated to commercial interests in the future. Their advocacy must continue indefinitely to maintain even the current level of protection.

The situation illustrates a fundamental challenge in REDD+ design: the mechanism must not only deliver measurable emission reductions at the national level but must also provide meaningful protection and benefits for the communities on whose territories the forests stand. If REDD+ payments flow to national governments without mechanisms to ensure they reach and protect forest communities, the mechanism risks perpetuating the same governance failures that have driven deforestation in the past.

Frequently Asked Questions

What is Indonesia's REDD+ program and how does it work?+

Indonesia's REDD+ program is the country's framework for participating in the international mechanism to reduce emissions from deforestation and forest degradation. As the country with the third largest tropical forest area in the world and one of the highest rates of deforestation, Indonesia is considered a critical partner in global efforts to address the land-use sector's contribution to climate change.

The Indonesian program involves establishing a national forest reference emission level — a baseline that represents historical rates of deforestation — against which future reductions are measured. Countries that demonstrate measurable reductions below this baseline are eligible for results-based payments. Indonesia has worked with the UNFCCC and bilateral donors to establish this baseline using satellite monitoring data and national forest inventories.

A key component of Indonesia's REDD+ program has been the establishment of pilot provinces and jurisdictional REDD+ programs. These sub-national programs allow specific regions to develop their own monitoring, reporting, and verification systems and to demonstrate emission reductions that can eventually be aggregated to the national level. Pilot programs in provinces such as Central Kalimantan and Jambi have received international technical and financial support.

The institutional architecture for REDD+ in Indonesia has evolved significantly since the first bilateral discussions with Norway began in 2009. A dedicated REDD+ agency was established, subsequently merged into the Ministry of Environment and Forestry, and a national forest monitoring system using satellite data has been progressively strengthened. However, translating this institutional progress into measurable reductions in on-the-ground deforestation has proven more difficult than anticipated.

What is the Norway-Indonesia bilateral forest deal and has it worked?+

The Norway-Indonesia bilateral partnership on forest conservation, announced at the Oslo Climate and Forest Conference in May 2010, was one of the largest bilateral agreements on forest conservation ever concluded. Norway pledged up to one billion dollars over several years in exchange for Indonesia implementing a series of forest governance reforms, including a moratorium on new logging permits in primary forests and peatlands and the development of a national forest monitoring system.

The first phase of the agreement involved a readiness contribution of 30 million dollars to help Indonesia put in place the institutional structures needed for REDD+ implementation. This was followed by payments tied to specific policy milestones, including the implementation of the moratorium. The results-based component of the agreement would eventually provide payments for measurable reductions in deforestation below Indonesia's reference emission level.

Implementation of the moratorium, which was the central early deliverable of the deal, was delayed by several months and ultimately issued in a form that conservation groups criticised as having significant loopholes. Concession areas and agricultural conversion permits issued before the moratorium took effect were grandfathered in, meaning that large areas of forest already allocated for conversion were not protected. The definition of primary forest used in the moratorium also excluded areas that conservationists considered ecologically valuable.

Despite these criticisms, the Norway-Indonesia deal has had significant positive effects on forest governance in the country. The partnership catalysed the development of the One Map initiative, which has worked to resolve conflicting spatial data on land tenure and forest classification across government agencies. It has also maintained political attention on deforestation at the highest levels of government and has built capacity in forest monitoring and governance that has long-term value regardless of the specific outcomes of any single policy instrument.

How has corruption affected forest conservation in Indonesia?+

Corruption has been a persistent and serious obstacle to forest conservation in Indonesia. The forestry sector, which involves the allocation of enormous resource rents through concession licensing, has historically been a major site of corrupt transactions between companies, local officials, and national politicians. Estimates from the 1990s suggested that billions of dollars from national reforestation funds could not be accounted for, representing one of the largest documented cases of natural resource revenue misappropriation.

Corrupt practices in the allocation of logging and plantation concessions have contributed directly to deforestation. Companies with political connections have been able to obtain concession permits over areas designated as protected forest, or to convert production forest to palm oil plantations in violation of environmental regulations. Local officials in forest-rich regions have sometimes profited personally from facilitating these conversions, creating systemic incentives for deforestation that are difficult to address without fundamental governance reform.

The decentralisation of forest governance that occurred in Indonesia following the fall of the Suharto regime in 1998 had mixed consequences for forest conservation. While it created opportunities for local communities to engage in forest management, it also dispersed the authority to issue concession permits across hundreds of district governments, many of which lacked the capacity or the institutional safeguards to resist pressure from commercial interests seeking to acquire forest land.

Efforts to address corruption in the forestry sector have included the establishment of independent monitoring bodies, requirements for public disclosure of concession maps and permit decisions, and anti-corruption prosecutions of officials involved in illegal timber operations. Indonesia's Corruption Eradication Commission (KPK) has investigated and prosecuted cases involving forest officials, providing some accountability. However, systemic change requires sustained political will that has been inconsistently maintained.

What is the debate within Indonesia's government over peatland and plantation policy?+

One of the central tensions in Indonesian forest policy concerns the treatment of degraded peatlands and secondary forests. The national government has sought to simultaneously reduce deforestation of natural primary forests and peatlands while expanding oil palm and acacia timber production on what is characterised as "degraded" land. The challenge is that defining which land is genuinely degraded is technically and politically contested.

Industry and some government ministries have argued that land that has been partially cleared or degraded — having lost some of its original forest cover — should be available for agricultural development, including oil palm and acacia plantations. They contend that developing these areas is preferable to clearing pristine primary forest, and that plantation development contributes to national economic growth and rural employment.

Conservationists and some government agencies counter that much of what is labelled as degraded land in Indonesia retains significant ecological and carbon values that argue against conversion. Peatlands, in particular, retain enormous carbon stocks even after partial disturbance, and their drainage for plantation development releases carbon continuously for decades. The peatland fires that have repeatedly caused regional air quality crises in Southeast Asia are a direct consequence of this drainage.

The disagreement within the Indonesian government over how to define and manage degraded land has been a major source of delay in REDD+ implementation and in implementing the forest moratorium. Different ministries — particularly the Ministry of Forestry and the Ministry of Agriculture — have had conflicting interests and interpretations of relevant regulations, creating uncertainty for both conservation programs and commercial investors.

What is the situation of forest communities like Sungai Tohor and what threats do they face?+

Sungai Tohor is a peatland community on Meranti Island in Riau province, Sumatra, whose situation became emblematic of the threats facing forest-dependent communities in Indonesia. The community has traditionally managed the surrounding peat swamp forest as a resource base, harvesting sago, fishing, and collecting timber and non-timber forest products. This traditional management has maintained the peatland ecosystem that provides both livelihoods and enormous carbon storage.

The community has faced sustained pressure from the expansion of acacia and oil palm plantations, which require draining the peatland and converting it from diverse natural forest to monoculture. Companies with concession permits over areas adjacent to the community's traditional territory have moved to implement those permits, threatening to surround and eventually eliminate the peat swamp that the community depends on.

Community members of Sungai Tohor have actively advocated for government protection of their forests, working with civil society organisations to document the carbon values of their peatland and to present their case to national and international audiences. Their advocacy has helped draw attention to the gap between Indonesia's international REDD+ commitments and the on-the-ground realities faced by communities whose forests are threatened by plantation expansion.

The situation of Sungai Tohor and communities like it illustrates a broader challenge for REDD+ implementation in Indonesia: the mechanism is designed to reduce national-level deforestation, but the benefits of doing so do not automatically flow to the communities that bear the costs of restricting access to forest resources. Ensuring that REDD+ finance reaches and benefits forest communities, rather than simply compensating national governments, is a critical design challenge that remains unresolved in many contexts.