Deforestation and development: The hope of sustainable oil palm for Sri Lanka, Relief to plantations in Sarawak but NCR land claimants upset

Editor's note: With the rising push for corporate voluntary pledges to stop deforestation, the rise of concerns over smallholder development is no surprise. The baton of hectarage growth has earlier been handed from large corporate plantation groups to smaller corporations and smallholders. This is very evident in aggregate national data. WRI's report of a pick-up in deforestation in the broad down-trend in Brazil and Indonesia is interesting. Could this be a reaction to lower commodity prices? i.e. you need more production and area to hit your target income? Moreover, will palm oil supply-chain players be actually pressed to stop purchasing from sensitive zones and stick to their pledges for third party sourcing (certification targets 2018-2020)? Thus, if smallholders are discouraged from palm oil, will some turn other lower intensity (higher land use) activity? This would be perverse problem of this kind of voluntary sustainability policy leakage. How does REDD+ appear as a solution, so far? We'll keep an eye on this.

24 Nov 2017: The hope of sustainable oil palm for Sri Lanka

Opinion : Sustainable oil palm central to success of Sri Lanka’s plantation industry November 24, 2017 By Professor Asoka Nugawela: The superior potential of oil palm to reinvigorate the Sri Lankan plantation sector is undeniable. Growth in demand for palm oil in the world even surpasses that of tea and rubber. Unlike tea or rubber, palm oil is cheaper to produce and requires far less land, and far less investment. The only other close competitor for vegetable oil in Sri Lanka, coconut has a NSA and a COP of Rs. 40 and Rs.15 per nut respectively. However, coconut produces a yield per hectare (YPH) of only 7,000 nuts, whilst oil palm produces 18,000 kg per hectare annum.... In essence, oil palm is by far Sri Lanka’s most profitable crop. Coconut generates Rs. 175,000 per hectare per annum, while Tea and Rubber produce Rs. 45,000 and Rs. 50,000 respectively whereas oil palm generates Rs. 514,000 per hectare per annum.... Given the stark differences in the profit making potential of these crops, the only remaining question for the Sri Lankan plantation industry is whether we have the ability to establish and manage oil palm in a manner that is sustainable for all stakeholders and for the environment as a whole....

15 Oct 2017: Relief to plantations and landowners in Sarawak, but NCR land claimants wanted their land, not compensation; Africa agriculture neglect and land grabs

Land titles remain with LCDA but natives to receive compensation 14 Oct 2017 -- Yesterday, the Federal Court panel set aside the High Court order to rectify the title and ordered the state government and Kota Samarahan Land and Survey superintendent to pay compensation to the plaintiffs, with the amount to be decided by an inquiry. Met outside the courthouse later, a tearful Nyutan said he was unhappy with the decision. “We don’t want to get compensation. We want to have our land back. “This land was inherited from our ancestors and now we have lost it,” he said, adding that the villagers hoped for a better solution to land disputes.

Hunger in Africa, Land of Plenty by Jomo Kwame Sundaram, Anis Chowdhury SYDNEY and KUALA LUMPUR, Oct 14 (IPS) -- African agricultural productivity has not only suffered, but also African agriculture remains less resilient to climate change and extreme weather conditions. Africa is now comparable to Haiti where food agriculture was destroyed by subsidized food imports from the US and Europe, as admitted by President Clinton after Haiti's devastating 2010 earthquake....Despite its potential, vast tracts of arable land remain idle, due to decades of official neglect of agriculture. More recently, international financial institutions and many donors have been advocating large-scale foreign investment. A World Bank report notes the growing demand for farmland, especially following the 2007-2008 food price hikes. Approximately 56 million hectares worth of large-scale farmland deals were announced in 2009, compared to less than four million hectares yearly before 2008. More than 70% of these deals involved Africa.... In most such deals, local community concerns are often ignored to benefit big investors and their allies in government. For example, Feronia Inc – a company based in Canada and owned by the development finance institutions of various European governments – controls 120,000 hectares of oil palm plantations in the Democratic Republic of Congo.... Most such deals involve land already cleared, with varied, but nonetheless considerable socioeconomic and environmental implications. Local agrarian populations have often been dispossessed with little consultation or adequate compensation, as in Tanzania, when Swedish-based Agro EcoEnergy acquired 20,000 hectares for a sugarcane plantation and ethanol production.
Land grabbing by foreign companies for commercial farming in Africa is threatening smallholder agricultural productivity, vital for reducing poverty and hunger on the continent. In the process, they have been marginalizing local communities, particularly ‘indigenous' populations, and compromising food security.

6 Jun 2017: Sarawak activist murder - accused walk free

Bill Kayong murder: Shock and grief at court after three of the accused walk free  June 6, 2017, by Cecilia Sman

5 Jan 2017: More pendulum swing back in 2017? Mongabay stories on Brazil Amazon mega-industrial waterways plan and Sabah forest deal. Push for legal logging harvest faces policy leakage.

Editor's note: 2H2016 there was market chatter on more Sabah forest deals, and now a write-up talks about an October 2016 sale of 100k ha there that worries NGOs. Also note the counter-trends: rising deforestation in Brazil and analysis that official data half reports tree losses (not covering land clearance in small pieces below threshold of monitoring by PRODES). For Indonesia, award of first-ever indigenous land rights (13k ha) to 9 communities; with worries of deforestation to come.

Sudden sale may doom carbon-rich rainforest in Borneo 2 January 2017 / John C. Cannon - Home to critical watersheds and orangutans, a 101,000-hectare forest located in the Trus Madi Reserve was on track to serve as a blueprint for a conservation economy, before the rights to log it were sold in October.

Temer government set to overthrow Brazil’s environmental agenda 21 December 2016 / Sue Branford and Maurício Torres -- Brazil’s powerful agribusiness lobby (bancada ruralista) is pushing a raft of new laws to set back environmental and indigenous protections by 30 years.... A catastrophic setback to environmental and indigenous protections was narrowly averted last week when quick action from two federal deputies prevented the agricultural lobby from forcing passage of bills to authorize construction of three mega-industrial waterways in the Amazon and elsewhere.... The Congress will likely pick up the bills again after the recess in February. They would authorize building many dozens of dams and industrial waterways in three river basins — PDC 119/2015 on the Tapajós, Teles Pires and Juruena rivers in the Amazon; PDC 120/2015 on the Tocantins and Araguaia rivers, also in the Amazon; and PDC 118/2015 on the Paraguai River.... In 2005, a similar bill was passed, fast tracking the Belo Monte dam and bypassing proper environmental evaluation. Today, Norte Energia, the consortium that built the Amazon mega-dam has been charged with environmental crimes, ethnocide and is under investigation for corruption.... Another bill working its way through the National Congress would completely gut the environmental licensing process for most infrastructure projects, while still another would take away hard won protections guaranteed to Brazil’s indigenous people in the 1988 Constitution....

Illegal logging shows little sign of slowing 30 December 2016 / Morgan Erickson-Davis -- A recent report finds regulation loopholes, an uptick in organized crime, and lax land rights are allowing illegal logging to thrive.“Forestry crime including corporate crimes and illegal logging account for up to $152 billion every year, more than all official development aid combined,” said Erik Solheim, Head of UN Environment, one of the partner organizations supporting the assessment. ....It finds that bilateral trade agreements between producer and consumer countries – e.g., the European Union’s Forest Law Enforcement, Governance and Trade Action Plan (FLEGT) that requires timber products imported into the EU be legally harvested – have prompted shifts in the timber trade to less restrictive domestic markets. The researchers also found jumps in exports to India and China, which have less stringent regulations and are now the biggest importers of both legal and illegal tropical wood....

Jokowi grants first-ever indigenous land rights (13k ha) to 9 communities, 4 January 2017 / -- That movement still has a long way to go. The nine “customary forests” — known as hutan adat in Indonesian — acknowledged by President Joko Widodo’s administration last week encompass a total of 13,100 hectares (32,370 acres). But the Indigenous Peoples Alliance of the Archipelago (AMAN) has mapped more than 8.2 million hectares of customary lands it says belongs to the nation’s adat groups, as those who practice ancient modes of knowledge, belief, community and economy are called here.

5 Jan 2017:  Worries about Myanmar plantations expansion

The human cost of palm oil production in Myanmar - Aggressive expansion of plantations enacted in southern provinces largely ignoring environment and workers' rights. By Taylor Weidman | 04 Jan 2017

21 Dec 2016:  $3.3m in new grants to protect Kalimantan forests, 10 countries with the most protected areas (41-54% versus 14.8% for the world)

$3.3m in new grants to protect Kalimantan forests by The Jakarta Post December 14, 2016 -- The Tropical Forest Conservation Act Kalimantan (TFCA Kalimantan), a partnership program among the US government, the Indonesian government, the Nature Conservancy (TNC) and the World Wildlife Fund for Nature (WWF) Indonesia, has approved 14 new grants worth $3.3 million for local non-governmental organizations (NGOs) in Indonesia. The US Embassy in Jakarta said in a statement on Wednesday that the NGOs would work with forest-dependent communities to conserve tropical forests, protect natural resources and wildlife and improve livelihoods....

10 countries with the most protected areas by Melissa Breyer,  December 14, 2016 -- As of now, a mere 14.8 percent of the world’s total land enjoys protected status; which is actually a step-up from 1990 when it was just 8.2 percent. Surprisingly, one of the world’s leading oil exporters took first place for percentage of land designated as protected. Countries with the most protected areas
1. Venezuela (53.9 percent of total land area)
2. Slovenia (53.6)
3. Monaco (53.4)
4. Bhutan (47.3)
5. Turks and Caicos Islands (44.4)
6. Liechtenstein (44.3)
7. Brunei Darussalam (44.1)
8. Seychelles (42.1)
9. Hong Kong (41.8)
10. Greenland (41.2)

12 Dec 2016: Deforestation increasing in Brazil, Are Brazil's Deforesters Avoiding Detection?

Editor's note: Did Brazil's official PRODES data underestimate 900,000 ha of deforestation? Read Conservation Letters, Are Brazil's Deforesters Avoiding Detection? by Peter Richards et al. 

With deforestation increasing in Brazil, will Norway ask for its US$1 billion REDD money back? Chris Lang  8 December 2016 -- On 29 November 2016, Brazil’s National Institute for Space Research (INPE) released its estimate of deforestation in the Brazilian Amazon for the period August 2015 to July 2016. It’s not good news. Deforestation increased by 29% compared to the previous year.... The actual area deforested is even largely. A recent study in Conservation Letters found that Brazil was under-reporting deforestation rates in its official figures. The study found that about 9,000 square kilometres of forest was cleared between 2008 and 2012 without the deforestation showing up in the official figures.... Part of the problem is that the Brazilian Amazon by Satellite Project (PRODES) excludes areas of less than 6.25 hectares. Leah VanWey, co-author of the research and senior deputy director at the Institute at Brown for Environment and Society, said... We showed that while deforestation in large plots of primary rainforests has declined, it has expanded in these areas not tracked by PRODES....In an article in Nature, Jeff Tolleson quotes Paulo Barreto, a senior researcher at the Amazon Institute of People and the Environment, as saying that the size of the forest tracts that are being cleared is increasing. Tolleson notes that this is “a sign that the major players are investing in illegal deforestation”.....

Bad news from Brazil: Deforestation rates are going up and are likely to go even higher Chris Lang in Brazil 24 November 2016

Are Brazil's Deforesters Avoiding Detection? by Peter Richards, Eugenio Arima, Leah VanWey, Avery Cohn, Nishan Bhattarai First published: 7 November 2016 -- Abstract: Rates of deforestation reported by Brazil's official deforestation monitoring system have declined dramatically in the Brazilian Amazon. Much of Brazil's success in its fight against deforestation has been credited to a series of policy changes put into place between 2004 and 2008. In this research, we posit that one of these policies, the decision to use the country's official system for monitoring forest loss in the Amazon as a policing tool, has incentivized landowners to deforest in ways and places that evade Brazil's official monitoring and enforcement system. As a consequence, we a) show or b) provide several pieces of suggestive evidence that recent successes in protecting monitored forests in the Brazilian Amazon may be doing less to protect the region's forests than previously assumed.... PRODES deforestation diverged from other deforestation indicators after 2008. From 2002 to 2008, PRODES estimated that, on average, approximately 19,000 km² of forests were lost annually in the Amazon Biome. Deforestation was highest from 2002 to 2005, when forest loss rates exceeded 20,000 km² per year. Rates then fell over the course of 2006–2008 to approximately 10,000 km². After PPCDAm ii, they fell even further to 5,000 km² per year. ... From 2002 to 2008, the GFC data estimated that, on average, about 20,000 km² of forests were lost per year. Just as with PRODES, GFC recorded the highest forest loss rates during the early part of the decade. Rates then dropped in 2006 and 2007, to approximately 15,000 km² per year. However, loss rates did not drop to the same extent as the PRODES estimates after 2008. From 2009 to 2013, deforestation rates in the GFC data remained around 10,000 km² per year, or roughly double PRODES levels. Significant deforestation spikes occurred in 2010 and 2012, when loss rates increased to approximately 15,000 km² per year..... The FIRMS data follow the GFC data. Fires were prolific during the early 2000s. The number of fire incidents reached a nadir in 2005, but fell to lower levels in 2006. From 2009 to 2013, the number of fires recorded per year fell, on average, fell to less than half of levels observed earlier in the decade. Significant spikes in fire incidents were observed in 2010 and 2012, the same years for which deforestation spikes were observed in the GFC data..... The largest discrepancies between the GFC and PRODES data were found in northern Mato Grosso, where a thriving soybean sector is creating high demand for land; and in northeastern Pará, where investments in cattle processing, soybean production (in the region around Paragominas), and palm oil production are transforming the region into one of the most rapidly growing rural economies in the Amazon (Figure 2). We argue that these areas are those where landowners would have both the greatest incentives to avoid detection, and be more likely to have knowledge on how to avoid the monitoring system. .... The greatest returns to opening new land may be in these higher valued regions in north-central Mato Grosso and in northeastern Pará. Landowners in these areas, presumably, would thus have had both the greatest incentive to continue opening land and more awareness with respect to which lands could be opened without triggering a deforestation observation. Smallholder farmers and ranchers, in contrast to their more capitalized counterparts, may not have had access to the same technical knowledge. They also would have had less incentive to avoid deforestation detection. Small farming areas are less likely to be subject to environmental enforcement, despite higher rates of forest loss (Godar et al. 2014; Schneider & Peres 2015; Richards & VanWey 2016).....

12 August 2016: Indonesia news links

Elephant population in Sumatra shrinks drastically  The Jakarta Post  Jakarta | Fri, August 12 2016

Only 5 Sumatran Tigers Left in Bengkulu's Mukomuko By : Usmin & Ratri M. Siniwi | on 2:03 PM August 05, 2016 -- According to Fernandi, one of the major causes is due to the major loss of habitat, leaving the tigers few places to hunt for food and driving them to hunt outside of conservation areas. Sumatran tiger habitat has been shrinking after decades of the palm oil plantation boom — which led to a land clearances — across Sumatra.

Hundreds leave home in palm oil conflict by Severianus Endi  The Jakarta Post Pontianak | Tue, August 2 2016 -- Hundreds of residents from several hamlets in West Kalimantan have fled their homes to avoid arrest over their alleged involvement in a conflict with an oil palm company operating plantations in the area. The residents from the area around the village of Olak-Olak in Kubu district, Kubu Raya regency, have reportedly escaped to regions in and around Pontianak City. In search of support, around 50 of them approached the West Kalimantan chapter of the National Commission on Human Rights (Komnas HAM) in Pontianak on Monday to report the case. Some women were crying while carrying their children, who have not attended school for nearly a week.

30 July 2016: High Tropical Deforestation from Oil Palm Production reported 

Peer-Reviewed Study Finds High Tropical Deforestation from Oil Palm Production 28 Jul 2016 --- A new study, published in the journal PLOS ONE, found high levels of oil palm-driven deforestation over a 25-year period in Southeast Asia and South America, but relatively low levels in Mesoamerica (Mexico, Central America and the Caribbean) and Africa. Three of the countries studied – Ecuador, Peru and Indonesia – had the greatest levels of observed deforestation within sampled sites, with more than half of the oil palm grown on land deforested during the study period. The study by researchers at Duke University and the Union of Concerned Scientists (UCS) is the first to examine past deforestation and potential future deforestation and biodiversity impacts associated with oil palm plantations in 20 countries across the world. The study used satellite imagery to evaluate where oil palm plantations replaced forests from 1989 to 2013........The study’s key findings included the highest conversion rates of tropical forests to oil palm plantations in sampled areas in the following countries: Ecuador (60.8 percent), Indonesia (53.8 percent), Peru (53.1 percent), Malaysia (39.6 percent) and Brazil (39.4 percent).

Forests, species on four continents threatened by palm oil expansion July 27, 2016 by Varsha Vijay -- As palm oil production expands from Southeast Asia into tropical regions of the Americas and Africa, vulnerable forests and species on four continents face increased risk of loss, a new Duke University-led study finds.
Using 25 years of high-resolution Google Earth and Landsat satellite imagery, Vijay and her team tracked the extent of this deforestation in four regions: Southeast Asia, Africa, South America and Mesoamerica, which includes Mexico, Central America and the Caribbean.... "Many past studies have focused solely on Indonesia and Malaysia, which produce more than 80 percent of the world's palm oil. By evaluating deforestation caused by palm oil production in 20 countries across four regions, our study demonstrates that the biodiversity impacts of this expansion are very different from country to country and region to region," said Clinton Jenkins of the Institute for Ecological Research in Brazil..... "The palm oil industry has a legacy of deforestation, and today consumer pressure is pushing companies toward deforestation-free sources of palm oil," noted Sharon Smith of the Union of Concerned Scientists, who co-authored the study with Vijay, Pimm and Jenkins. "This research helps us understand where to focus on using government regulation and voluntary market interventions to shape oil palm plantation expansion in ways that protect biodiversity-rich ecosystems and prevent deforestation," Smith said. 
 Read more at:

27 July 2016: Austria study of satellite maps suggest palm oil could double without forest damage

Editor's note: Expertise in mapping studies seems focussed in Europe and North America. However, data has to be carefully verified. 

Land Used for Palm Oil Could Double Without Damaging Forests: Researchers By : Chris Arsenault | July 27, 2016 -- Researchers from the Austria-based International Institute for Applied Systems Analysis (IIASA) studied satellite maps from Southeast Asia, Africa and Latin America to determine where the crop used to make vegetable oils and other consumer products could be expanded sustainably.  The findings follow criticism from campaign groups who say the expansion of palm oil plantations has destroyed rainforests and displaced local people from their ancestral lands.  An area larger than Uruguay, more than 18 million hectares (44.5 million acres) of land, is covered by palm oil plantations, up from six million hectares in 1990, IIASA said.  Expansion of the crop, which accounts for about 30 percent of all vegetable oil used worldwide, has been concentrated in biodiversity-rich tropical forests in Malaysia and Indonesia.....Satellite data shows an area of up about 19 million hectares onto which the industry could grow without damaging forests that are particularly valuable for biodiversity or storing carbon as means of combating climate change, IIASA said.  Globally, an estimated three million small farmers work in the palm oil business and this could rise above seven million if the industry is expanded sustainably, IIASA said. ...Reuters..

25 July 2016: Situating smallholders at the fore - need to transfer the rewards upstream in the value chains,  the limited effectiveness of communal forestry, a holistic reappraisal of what is deemed sustainable

Situating smallholders at the fore - Empowering smallholders is essential for economic development – and to protect forests  Deanna Ramsay  19 Jul 2016 --  But the fact is that now companies are making commitments to source supply that is clean, that is deforestation free. And I think that’s one of the main issues that they’re struggling with is how to build these clean sources of supply that involve smallholders. But that is going to imply for them to build some kind of agreements with these groups of smallholders that are supplying these companies. So that’s the big issue. Because the majority of smallholders are independent smallholders, like in the oil palm sector in Indonesia.....I think what is needed is business models that are able to share those costs – share the cost, share the risks and share the benefits. Because in most of the cases you have business models that then transfer the costs to the producers that are upstream in the supply chains. So they are the ones who pay for the cost. In an ideal situation, the companies also should be able – if they are targeting deforestation free in markets – they should be able if there is some reward to transfer the rewards upstream in the value chains.... So the smallholders can also benefit or receive some compensation on the costs that they are investing in improving the production systems. But that is still an open question, and we don’t know if that’s going to work in that way....

Community forestry in Central Africa: Has it been a success? New book draws lessons for participatory resource management in the Congo Basin 21 Jul 2016 -- ).....There are several factors that explain the limited effectiveness of communal forestry: (i) reforms to the forestry sector in Central Africa in the mid-1990s favored industrial concessions and community forests, (ii) the development of communal forests was never a fundamental challenge or stake for Central African states or for technical and financial partners, and, (iii) in countries like Cameroon where decisive experiments have been carried out, the relatively high cost of the forest acquisition process has prevented many decentralized territorial units from adopting this management system independently.........

Wood fuel not as bad for the environment as previously thought Jack Hewson  18 Jul 2016 -- .....“We’re saying that the studies that have been published so far have not been adequate to inform policy,” she said. “You find that most of the papers are either looking at the environmental factors and making broad conclusions from that, or the health factors where wood fuel is causing lots of respiratory disorders, and then there are those who are focusing on the economic aspects. But you don’t have studies that try to look at all of these issues together and, most importantly, at the trade-offs among them.”...In partnership with the United Kingdom Department for International Development (DFID), CIFOR has commissioned a number of systematic reviews as part of its Evidence-Based Forestry Initiative, including Cerutti and Sola’s research on wood fuel....“In this regard, we are now seeing a holistic reappraisal of what is deemed sustainable,” said Cerutti

7 July 2016: Olam Palm Gabon and Duke’s Nicholas School of the Environment recommend 108-118 tC/ha threshold for development with 1:2.6 set-aside to development area ratio, Scientific American article on HCV, 97% of 1.2 billion tons CO2E due Indonesia Haze Crisis 2015 

Editor's note: Readers reckon that set-aside areas may suit for low impact logging operations with FSC, so that oil palm and timber can co-exist with the needed certifications / sustainability schemes on both commodities with business synergy. The logging and oil palm link is well established especially for large concessionaires - the Malaysia FELDA large-scale developments in Pahang and Johore also featured revenues from timber, of which MARA, overseas timber business and local logging contractors/sub-contractors would have been part of the timber business.

CONSERVATION KEY TO CURBING EMISSIONS FROM OIL PALM AGRICULTURE IN AFRICA June 28, 2016  Featuring John Randolph Poulsen -- DURHAM, N.C. -- As oil palm production expands from Southeast Asia into Central Africa, a new Duke University-led study warns that converting Africa’s tropical forests into monoculture palm plantations will cause a significant spike in climate-warming carbon emissions. The authors urge regional governments to enact mandatory policies regulating which forests can be cleared and how much remaining forest must be set aside for conservation. “Our case study, which focuses on oil palm farming in the nation of Gabon, finds that converting even previously logged forest into oil palm plantations will lead to high carbon emissions,” said John R. Poulsen, assistant professor of tropical ecology at Duke’s Nicholas School of the Environment.  “Clearing just 11,500 hectares of forest -- or roughly 28,400 acres -- would release about 1.5 million metric tons of carbon into the atmosphere,” Poulsen said. “That’s equivalent to the annual emissions of some small developing countries.” However, the new study finds that these emissions could be completely offset over 25 years if development were centered on forests that store less carbon and if a portion of every development had conservation set-asides. Poulsen and his colleagues published their peer-reviewed study June 24 in the journal Conservation Letters....They used field measurements and LiDAR satellite data to calculate forest carbon stocks -- the amount of carbon stored in trees -- and potential carbon emissions at the site of a 50,000-hectare palm oil plantation in Gabon. The plantation is being developed jointly by the Gabonese government and the agribusiness firm Olam International Ltd., to test if low-emissions palm oil development is feasible in the equatorial country on the Atlantic Ocean..... “First, we recommend establishing a nationwide carbon threshold of 108 to 118 metric tons per hectare. Only forests that store less than this density of carbon will be considered suitable for development,” Poulsen said. “Second, palm oil companies will also have to set aside enough land within a plantation -- roughly one acre for every 2.6 acres developed -- to offset emissions. “The precise set-aside ratio may vary by site, but 2.6 to 1 is generally the point at which carbon storage in the conserved forest will offset carbon loss in the rest of the plantation and achieve net-zero emissions over time,” Poulsen explained.... “Although our study considers only forest carbon, and not biodiversity or other ecosystem services, we estimate there is enough low-carbon forest in Gabon to achieve net-zero emissions while still permitting the nation to meet its palm oil production goals,” he said. Allowing industry to voluntarily adhere to these new guidelines or opt out of them is not an option, he stressed. “To succeed, this approach needs to be mandatory and implemented by the government with careful land-use planning and strict enforcement.”   Support for this research came from Olam Palm Gabon and Duke’s Nicholas School of the Environment....; CITATION: “Reducing Carbon Emissions from Forest Conversion for Oil Palm Agriculture in Gabon,” Mark E.H. Burton, John R. Poulsen, Michelle E. Lee, Vincent P. Medjibe, Christopher G. Stewart, Arun Venkataraman, Lee J.T. White. Conservation Letters, June 24, 2016. DOI: 10.1111/conl.12265

Conservation to Compensate Carbon Emission Essential in Gabon  June 30, 2016

EU TIMBER REGULATION: As a major global supplier of timber products from various origins, Olam International Ltd is committed to sustainable forest management practices and third party verification of all wood sourced from outside our operations.,

Olam To Divest Timber Assets In Gabon For US$18.0 Million, Singapore, January 24, 2014 -- entered into an agreement with a consortium of Chinese investors to sell part of its forestry and saw milling assets in Gabon for a gross consideration of US$18.0 million.... The divestment, which is a part of Olam’s revised strategy to restructure the Wood Products portfolio, includes the sale of two saw mills in the Makokou region of Gabon, 2.5 hectares of land in the Special Economic Zone (SEZ) at Nkok, Gabon and associated forestry concessions. - See more at: (note: search of company website does not indicate any further divestment of Gabon timber business)

Can Oil Palm Plantations and Orangutans Coexist? Companies are partnering with environmental groups to aid the red apes, but results are elusive  By Melati Kaye on June 30, 2016 -- This lush portion of the plantation should be ideal habitat for orangutans. I have not spotted any, but according to Hendriyanto, my guide from the plantation’s conservation team, an estimated 14 of the red apes do indeed live here. .... Surveyors came up with that number by counting orangutan nests in this 657-hectare so-called "High Conservation Value" (HCV) enclave within the 18,000-hectare plantation. The population density survey and the HCV set-aside are required of oil palm companies like Hendriyanto's employer, Ketapang-based PT Kayung Agro Lestari (PT-KAL), for eco-compliance certification by the Roundtable on Sustainable Palm Oil (RSPO), a consortium that has been setting the industry's sustainability standards since 2004..... But one step outside this refuge lies a very different scene: blistering tropical heat and regimented rows of spiky oil palm trees spread over miles of ochre mud that turns to deep, rutted puddles after a drizzle. Borneo's forest-to-plantation ratio has plummeted in recent decades. Satellite data show that the island's forest cover dwindled from 76 percent to a mere 28 percent between 1973 and 2010. Deforestation has only accelerated since then, especially in 2015, when fires smoldered across 1.3 million hectares of peatland for months on end.... From an ape's point of view, the plantation vista presents an uninhabitable hellscape. From an industry standpoint, it is a prospect of burgeoning revenue. Half of the vegetable oil consumed around the world comes from oil palms. According to data from USDA and the World Bank, the global market for palm oil and palm kernels is around $47 billion..... To forestall such a public relations disaster, industry-leading oil palm companies have tried a series of conservation initiatives to show that orangutans and plantations can co-exist--hence the RSPO, the HCV enclaves and the relocation of orphaned apes to rehabilitation centers for later reintroduction back to the forest. The latest scheme is to interlink isolated HCV patches with migration "corridors" so that orangutans and other forest-dwelling creatures can disperse in accordance with their natural behaviors.... To implement such measures (and garner some third-party credibility), many companies have partnered with environmental non-governmental organizations (NGOs). But results have so far been elusive. Part of the problem is a general lack of data. But companies can also ignore or skimp on the NGO recommendations. Compounding matters, the RSPO and its ilk are agonizingly slow at investigating complaints, and their findings are no more than advisory, with no force of law. Moreover, Indonesian licensing laws can undermine conservation by reallocating forest leases of companies that do not exploit their allotted tracts fully or quickly enough. And with RSPO covering barely a fifth of the world’s palm oil operators, there is always a queue of wildcat planters ready to take up rescinded leases....

On land and in space, understanding the impacts of fires. To measure greenhouse gas emissions from the fires in maritime Southeast Asia in 2015, a variety of methods and expertise coalesced DEANNA RAMSAY   28 Jun 2016 -- The study’s authors determined that the carbon emissions released by the fires in September and October 2015 of 11.3 million tons per day were higher than those of the entire European Union, which daily released 8.9 million tons over the same period.....The widespread landscape fires in parts of Kalimantan, Sumatra and Papua last year generated noxious smoke and haze affecting millions – and international attention – and the team on the ground was the very first to assess the emissions from actively burning peatland..... “There have been some isolated studies before where people artificially set fires in the lab to try to understand the chemical characteristics of peatland fire smoke in Indonesia. But no one had done this on natural fires, and especially not on the kind of extreme fires seen in 2015. We are the first people to do that,” said King’s College London professor Martin J. Wooster, one of the study’s lead authors. The team used their measurements of ground-level smoke from burning peat to derive the emission factors, i.e. to understand how much carbon dioxide, carbon monoxide and methane is released for a particular amount of tropical peat burned. Satellites provided data on the heat output being radiated by the fires, as well as information on the amount of carbon monoxide present in the surrounding atmosphere. From this, the total carbon emissions were determined by combining the satellite measurements and the Copernicus Atmosphere Monitoring Service (CAMS) modeling framework with the newly determined emission factors from fires around Palangka Raya – one of the hardest hit sites. The researchers concluded that 884 million tons of carbon dioxide was released in the region last year – 97% originating from burning in Indonesia. The corresponding carbon emissions were 289 million tons, and associated carbon dioxide-equivalent emissions 1.2 billion tons.....“This sort of modeling has only been possible quite recently. When we saw the fires start in the region – knowing that it was an El Niño year – we were able to quickly start analyzing the situation, and we started contacting others who could contribute,” said study lead author Vincent Huijnen of the Royal Netherlands Meteorological Institute, who works on the CAMS framework. Wooster concurred about the clarity of their calculations because of fresh technologies....He said, “We found that this was the largest single fire event in terms of carbon emissions from Indonesia since 1997. We can much more confidently make our calculations because of the new satellite, modeling and field instrument technology that is now available compared to 20 years ago.”.... For David Gaveau, also a CIFOR scientist and study co-author, the fires in 2015 were different because they were primarily on drained, idle peatland. “In 1997 the drought lasted longer, the fires were more severe and a lot more forest burned. In 2015, fires mostly burned on degraded peatland covered with shrubs and wood debris,” he said.... “The last year has seen the largest single year atmospheric carbon dioxide increase since records began in the 1950s, and we calculated that the fires burning in Indonesia made up a significant component of the increase over what is ‘normal’ in non-El Niño years,” Wooster said..... For Murdiyarso, good policy is key – and providing numbers related to the 2015 fires can help. With the Indonesian government’s Peatland Restoration Agency established following the fires last year, there is movement to avert future fires.......

Vast Peat Fires Threaten Health and Boost Global Warming. Largest blazes on earth smolder for months in Canada and Indonesia By XiaoZhi Lim on July 2, 2016

THESE FIRES ARE HUGE, HIDDEN AND HARMFUL. WHAT CAN WE DO? Smoldering peat gives off massive quantities of carbon dioxide and other pollutants, but the search for solutions is on. By XiaoZhi Lim, freelance science reporter based in Singapore.  June 28, 2016 -- June 28, 2016 — As forest fires devastated Fort McMurray, Alberta, last month, a different sort of fire may have started beneath the ground. Peat, a carbon-rich soil created from partially decomposed, waterlogged vegetation accumulated over several millennia and the stuff that fueled Indonesia’s megafires last fall, also appears in the boreal forests that span Canada, Alaska and Siberia. With the intense heat from the Fort McMurray fires, “there’s a good chance the soil in the area could have been ignited,” says Adam Watts, a fire ecologist at Desert Research Institute in Nevada. Unlike the dramatic wildfires near Fort McMurray, peat fires smolder slowly at a low temperature and spread underground, making them difficult to detect, locate and extinguish.  ey produce little flame and much smoke, which can become a threat to public health as the smoke creeps along the land and chokes nearby villages and cities. Although they look nothing like it, peat fires are the “largest fires on earth.”And although they look nothing like it, peat fires are the “largest fires on earth,” says Guillermo Rein, a peat fire researcher at Imperial College in the United Kingdom....The boreal forests are thought to contain some 30 times more peat than Indonesia. Because they can smolder for weeks and months, sometimes even staying active underground throughout cold northern winters, peat fires emit on average the equivalent of 15 percent of anthropogenic greenhouse gas emissions per year, according to Rein — carbon that took thousands of years to sequester.... Rein recently received a five-year, €2 million grant from the European Research Council to develop a peat fire early warning system. He is trying to characterize the heat fingerprints of peat fires by replicating small peat fires in the laboratory and using infrared cameras to record the heat emitted. He hopes to use his findings to calibrate satellites specifically for peat fires, just as some motion sensors are calibrated to detect infrared radiation unique to humans.....Rein is also collecting the gases produced from his experiments and analyzing them for patterns that could become telltale warning signs of a growing peat fire. For example, the ratios of carbon monoxide or volatile organic compounds to carbon dioxide can be used to tell the difference between emissions from peat fires and those from combustion engines or power plants. These patterns could then be applied to handheld gas sensors or gas analyzers placed in drones, airplanes or buildings in nearby villages and cities to help detect peat fires....Once found, one problem to putting out peat fires is that peat soil repels water when it gets very dry, says Watts.... Adding a fire retardant to the water might help make water more effective at this. One example is Peat FireX, a plant-based powder developed in 2012 by Steve Sinunu, CEO of Texas-based EnvironX Solutions. When dissolved in water, it disrupts the strong hydrogen bonds between water molecules, making it easier for the water to penetrate soil. As the solution moves into the soil, it coats the peat to protect it from fire....Earlier this year, the Indonesian government adopted Peat FireX as a weapon against peat fires, according to Steve Sinunu and an independent company in Singapore who helped connect EnvironX with the Indonesian government....

Ravaged woodlands - Stricken trees provide clues about how America will adapt to global warming—but little hope that it can be averted   Jul 9th 2016 -- The growth of wildfires is a worldwide problem, with even bigger burns elsewhere. Siberia, Tasmania, Canada and Indonesia have seen record-breaking fires in recent years. According to Greenpeace, fire consumed over 7m acres of Russian forest in the year to May 23rd (the Kremlin offers much lower figures). The area of Canadian forest burning each year has roughly doubled since the 1970s; a wildfire near Fort McMurray, in Alberta, which started in May, has turned 1.5m acres of forest and 2,400 buildings to ash. Now heading north through Saskatchewan, the fire is reckoned to be Canada’s costliest natural disaster.

A new generation of forest managers in the Democratic Republic of Congo - A university on the banks of the Congo River is producing the next generation of experts on sustainable forestry.  Fai Collins 29 May 2016

Reserves need tweaks to withstand Amazon fire threat - Despite their rapid proliferation, 'Sustainable Use Reserves' in the Amazon aren't living up to their hype- especially when it comes to reducing fire.  Samuel McGlennon 30 May 2016

Quantifying the drivers of South American deforestation - New research uses spatially and temporally explicit data to better understand deforestation trends in South America.  Samuel McGlennon 27 May 2016

What’s Driving Deforestation Now? Doug Boucher, scientific adviser, Climate and Energy | April 14, 2016

The challenges of conserving tropical forests - From industrial concessions to community forests, new research looks at what constitutes responsible forest management TARA LOHAN  29 Apr 2016

Switching swidden to agroforestry – a small intervention with big potential in West Java By converting to agroforestry, farmers in Indonesia could reap major environmental, economic and social benefits. KATE EVANS 26 Apr 2016

12 December 2015: High Carbon Stock study by Sustainable Palm Oil Manifesto - companies and Sabah to test it out; CIFOR REDD+ links and Indonesia REDD handover to FORDA

Sabah To Test High Carbon Stock For Sustainable Oil Palm December 11, 2015   KUALA LUMPUR, Dec 11 (Bernama) -- The Sabah Forestry Department has committed to test the High Carbon Stock plus (HCS+) methodology for sustainable oil palm development in six months following the release of the HCS+ study's findings.  "We are very keen to pursue the offer from the Sabah Forestry Department which indicated that this would be very helpful for them.
 "This shows that the state is very committed towards sustainable palm oil and a sustainable economy," said Forum for the Future founder Director Jonathan Porritt....

CIFOR links:

New NASA Probe Will Study Earth’s Forests in 3-D, September 8, 2014, By revealing the 3-D architecture of forests in unprecedented detail, GEDI will provide crucial information about the impact that trees have on the amount of carbon in the atmosphere. Although it is well-established that trees absorb carbon and store it long-term, scientists have not quantified exactly how much carbon forests contain. As a result, it’s not possible to determine how much carbon would be released if a forest were destroyed, nor how well emissions could be countered by planting new trees.... "One of the most poorly quantified components of the carbon cycle is the net balance between forest disturbance and regrowth,” said Ralph Dubayah, the GEDI principal investigator at the University of Maryland. “GEDI will help scientists fill in this missing piece by revealing the vertical structure of the forest, which is information we really can’t get with sufficient accuracy any other way.”.. GEDI is scheduled to be completed in 2018. NASA’s Earth Venture Instrument program is part of the Earth System Science Pathfinder program, managed by NASA’s Langley Research Center in Hampton, Virginia, for NASA’s Science Mission Directorate. The GEDI team includes co-investigators from Goddard; Woods Hole Research Center, Woods Hole, Massachusetts; the U.S. Forest Service, Ogden, Utah; and Brown University, Providence, Rhode Island.

30 November 2015: Malaysia Pahang bauxite mining compensation plan for residents, DOE found high mercury levels in rivers

RM500-1,000 Monthly Compensation To Be Paid To Pahang Residents Affected By Bauxite Mining   30 November 2015 Chairman of the Bukit Goh Bauxite Coordination Committee, Datuk Abd Wahid Abd Manap had announced yesterday that the compensation will be paid out to individuals identified by the committee from funds provided by the bauxite contractors. "For now, we can offer RM1,000 compensation to each business operator and RM500 per month to each resident whose livelihood have been badly affected by the bauxite mining scourge.... According to media reports, bauxite mining activities have released heavy metal particles into Kuantan’s air and water supply, leading to an outbreak of respiratory problems and skin disease with the heavy particles even contaminating water treatment plants.

23 November 2015: Malaysia - Pahang DOE  finds high mercury levels in rivers near bauxite mining

DOE finds high mercury levels in rivers near bauxite mining sites, says Kuantan MP BY RAM ANAND Published: 23 November 2015

2 November 2015: Malaysia prepares for monsoon for flood prone Kelantan, Pahang and Terengganu; Indonesia REDD-I partnership celebrates five years with handover to FORDA

All prepared for the worst by nicholas cheng, neville spykerman, andsyed azhar November 2, 2015; KUALA LUMPUR: The monsoon season is coming and the Fire and Rescue Department says it is prepared for things to go as bad as the east coast flood crisis last year. Over the year, officers in the flood prone states of Kelantan, Pahang and Terengganu have been conducting water training in rivers to test their readiness to evacuate scores of people should water levels rise. Fire and Rescue Department assistant director-general (Operations Division) Datuk Soiman Jahid said assets had been placed in the states in preparation for the rainy season. “We are preparing for it to be as bad as last year. We have conducted water training for officers to be well versed in navigating floods and we have made sure our fire engines and boats are all in good working order in those states.

REDD-I partnership celebrates five years with handover to FORDA 26 Oct 2015; CIFOR’s Director of Communications and External Relations, John Colmey, officially transferred the management of to FORDA Director General, Henry Bastaman, during the International Conference of Indonesia Forestry Researchers (INAFOR) at the IPB Convention Center, Bogor.... (REDD-I), jointly developed by CIFOR and FORDA, has become Indonesia’s leading website for reliable information on forests, climate change and REDD+ in Indonesia. It was launched in 2011 after CIFOR and FORDA identified an information gap on climate change problems and solutions in the country. Now, the website attracts 6,000 visits per month and has 9,300 subscribers to its monthly news updates.

20 October 2015: NGO C4 raises concerns about Kelantan deforestation above cap of 5,960 hectares per  year after 2014 deadly floods displaced more than 200,000 people and 21 lost their lives

Anti-graft group fears Kelantan deforestation will breed corruption, cronyism Published: 18 October 2015 1:50 PM The Centre to Combat Corruption and Cronyism is concerned over Kelantan's logging policies after the state approved additional land for logging. – Photo courtesy of Flickr, October 18, 2015.The Centre to Combat Corruption and Cronyism (C4) has raised concerns that the deforestation in Kelantan, following policies by the state government, will breed corruption and cronyism. C4 executive director Cynthia Gabriel in a statement today called on the Kelantan government to reveal if the multiple approvals awarded to a private company has breached the state's annual logging cap. She said that during the height of the flood crisis in Kelantan last December, Kelantan Menteri Besar Datuk Ahmad Yakob blamed “illegal land clearing and logging” for the devastating floods in the state, and added the government had always capped logging at 5,960 hectares a year, the standard set by the National Land Council. "So it comes as a shock to discover that Kelantan recently approved an additional 4,500 hectares to a private company for logging, while 9,000 acres (3,642 hectares) are to be used for oil palm planting." - See more at:

Kelantan deforestation policies need urgent answers – Cynthia Gabriel Published: 18 October 2015 2:00 PM It was only last year that the great floods – dubbed the worst flood in Malaysian history since 1971 – hit Malaysia from December 22, 2014 to January 3. More than 200,000 people were displace while 21 lost their lives. At the height of the crisis, Kelantan Menteri Besar Datuk Ahmad Yakob had then blamed “illegal land clearing and logging” as among the causes for the devastating floods in the state. He claimed the government had always capped logging at 5,960ha a year, the standard set by the National Land Council...... In his statement, Husam claimed that the private companies had obtained several approvals from the state government, raising the question if only selected crony companies are benefitting from the state’s generosity. - See more at:

19 October 2015: CIFOR - Can we trust country-level data from global forest assessments? CIFOR, USAID to Conduct Research on Zero-Deforestation Policy

Palm oil company caught destroying primary forest in endangered ecosystem  Tuesday 13 October 2015 by - RAN photo deforestation lesuer Non-profit forest group, Rainforest Action Network took pictures of the forest, which it says was cleared by palm oil company PT Tualang Raya in August 2015 in the Leuser Ecosystem in northern Sumatra. Image: Paul Hilton/ RAN

Palm oil plantations devouring forests in West Africa Global Information Network |   September 29, 2015,  newly released study has found that trees covering an area twice the size of Maine were cut down worldwide in 2014. But, the biggest threat to forests is looming over West Africa. Governments there have been buckling to pressure to convert “vacant” land and sell off forests for more profitable uses, namely palm oil plantations—a key ingredient in shampoo, toothpaste, ice cream, floor polish and many other foodstuffs and cosmetics. By 2020 global demand for palm oil is expected to double and then triple by 2050

CIFOR, USAID to Conduct Research on Zero-Deforestation Policy 18 October, 2015 | 13:38 WIB TEMPO.CO, Jakarta - The Center for International Forestry Research (CIFOR) has teamed up with the United States Agency for International Development (USAID) to conduct a research on the implication of palm oil companies’ commitment to forest and landscape in Indonesia. Steven Lawry, the director of CIFOR’s Forests and Governance Research, said that one of the research topics was related to the evaluation of zero-deforestation policy made by large-scale oil palm companies. The research, Lawry said, was aimed at answering the most urgent questions that affect forest governance in Indonesia. “This includes evaluating the zero-deforestation policy pledged by huge palm oil companies and understanding how they can ensure access for farmers to a supply chain that is free of deforestation,” Lawry said in a press release as quoted by on Sunday, October 18, 2015.

Fire & haze in Indonesia: Research and resources 9 Oct 2015 ; Forest fires occur in Indonesia every dry season. However, the haze that spreads to other countries is no longer restricted to drought years, and has become increasingly frequent due to ongoing deforestation of peatlands – with profound health and economic impacts across Southeast Asia. There are no easy solutions. The complex factors involved in every fire mean the problem goes far beyond who actually lights the match. That’s why the Center for International Forestry Research (CIFOR) has collected its work on fire and haze in Southeast Asia. The new site explains the context, impacts and history of this ongoing crisis – drawing upon cutting edge science and research. See the full collection at

Can we trust country-level data from global forest assessments? DG’s Column by Peter Holmgren - Significant differences exist between the FAO's Global Forest Resource Assessment and the Global Forest Watch results.... against what reference should we monitor progress towards targets expressed in these commitments? And do we have the processes in place to deliver accurate findings? In an earlier article I compared attempts to assess changes in the global forest with the story about blind men and the elephant. Differences in methods, definitions, completeness and field verifications inevitably led to entirely incomparable results between Global Forest Watch and the FAO Global Forest Resources Assessment. These results are widely communicated and used as a reference in many political and economic analyses. In fact, there are few alternative sources of information on global forest change....To make the data easier to digest, I’ve extracted the 29 countries that had more than 20 Mha forest in 2005, according to FRA 2005. Together, these countries represent about 85% of the world’s forests. Their total forest area change in the period according to FRA is -2.2 Mha/yr, and the “tree cover loss” in GFW 16.4 Mha/yr. See the data table here. Going country by country, it is clear that the discrepancies are caused by quite different situations on the ground. I decided to subjectively divide the 29 countries into five categories in an attempt to highlight why these gaps are so significant. Category 1. Complete contradiction – countries where FRA shows a stable or increasing forest area, whereas GFW reports major tree cover losses. Includes: Australia, Canada, China, Finland, Gabon, India, Malaysia, Russia, Sweden and the United States, representing about half of the world’s forests. – FRA 2015: total gain of 2.4 Mha/yr – GFW: total loss of 9.6 Mha/yr...

One wicked problem, three major challenges - How to stop deforestation while boosting benefits for smallholders and meeting market demand?  by Pablo Pacheco Friday, 25 Sep 2015; To achieve zero deforestation, new ties need to be woven between different levels of government, the private sector and civil society. But in order to act on private-sector commitments, incentive systems and regulations that are reinforcing old patterns first need to be untangled. Beef and soybean production are the main drivers of deforestation in Brazil, and oil palm expansion threatens Indonesia’s forests and peatlands. These two countries have the largest forest areas in the world – and the largest forest losses over the past five years. Powerful industry and multi-stakeholder groups that have an extensive supply base in Brazil and Indonesia signed the New York Declaration on Forests in 2014, pledging to make their supply chains deforestation-free by 2030. The Indonesian government signed the declaration; Brazil did not, although some of its subnational governments did.

CIFOR DG: Seeing the big picture on the world’s forests By: GLF Committee By Peter Holmgren, CIFOR Director General... This week we have the opportunity to compare different assessment of the world’s forests. FAO presents the results of the Global Forest Resources Assessment 2015 (FRA 2015) at the World Forestry Congress in Durban. Global Forest Watch has released new global satellite observations of tree cover reductions in 2014. And Nature has published an article describing over 400,000 field plots from national forest inventories that were used to count all of the world’s trees.
So, what do these different studies have to say about the forest resources of the world and how they change?...

Kissing livelihoods and ecosystems goodbye — the very real threat of 'fake forests' in Africa  15 Sep 2015 09:25|Samantha Spooner; Planted forests have been increasing in Africa at a rate of 0.2 million hectare a year--to the benefit largely of the commercial plantations....This culminated in a protest on September 10 in Durban, when over 3,000 people took to the streets as part of an action against “fake forests”. The march concluded with Greenpeace executive director, Kumi Naidoo, handing over a 100,000 signature petition against plantations to the WFC Programme Manager Motsamai Nkosi. Fake forest threat. Since 1990, some 38 million hectares  of primary forest have been reported as modified or cleared. This does not necessarily mean that this forest is converted to other land uses. Primary forest, when modified but not cleared, changes into other naturally regenerated (secondary) forest and in some cases planted forest. Planted forest area has increased by over 110 million hectares since 1990, reaching a to al of 290 million hectare in 2015, and accounts for 7% of the world’s forest area. In the case of Africa, the amount of replanted forest increased by 0.2 million hectares per year from 2010, totalling 16 million hectares in 2015. What is of concern to the civil society groups is that even the FAO is not making enough of a differentiation between natural and planted forests and the impact this has on the ecosystems and local communities. For example, the FAO’s definition of ‘“forest” includes commercial plantations of fast growing trees.

16 October 2015: REDD and Indonesia peatland burning

Can REDD save Indonesia’s peatlands from burning?   By Chris Lang 14 October 2015

11 October 2015: Cameroon REDD plan critiqued  "Poor communities will not simply starve in order to abide by rules agreed between the government and conservation organisations, violence by ecoguards already a problem

Cameroon’s REDD plans critiqued by NGOs ahead of World Bank meeting By Chris Lang 9 October 2015' .... ER-PIN focusses largely on reducing emissions from community agricultural activities. This makes Cameroon’s Emissions Reductions Program (ER-P) far less likely to succeed in reducing deforestation: Poor communities will not simply starve in order to abide by rules agreed between the government and conservation organisations; a programme which does not genuinely incorporate their rights and interests will see high levels of non-compliance (and therefore continuing deforestation and GHG emissions), most likely accompanied by significant levels of serious human rights violations (including violence by ecoguards, for example, something which is already a significant problem in Cameroon)....

30 September 2015: Norway to complete $1 billion payment to Brazil (in December) for protecting Amazon, CIFOR reports lucrative illegal market for crop land in Indonesia, reader points to northern ASEAN haze problem too 

Editor's note: I have this from a reader based in northern ASEAN "Asia has equally serious annual haze problems in other regions where there are no plantation crops (and no Singapore or KL nearby). Earlier this year Thailand's Chiang Rai airport was closed due to serious smoke haze, and public health warnings were issued around Northern Thailand. I believe some areas were as bad as Singapore but largely unreported in international media. (In early 2015, many) hot spots were located in northern ASEAN.... (getting) much, worse with over 900 satellite marked hotspots and serious disruption of commercial aviation throughout the region... . At the northern limits of oil palm cultivation, normally around 10 degrees N , the sunsets are currently a spectacular red due to smoke haze drifting down from further north.  Much of northern Myanmar, Thailand, Laos, Cambodia is often shrouded in smoke haze at this time of year, to the extent of sometimes closing airports. This is a normal dry season phenomenon which has nothing to do with oil palms ( although it is man-made, as seen from the many satellite hotspots). This is not to suggest that clearing land for new oil palm cultivation is not an important contributor to smoke haze.  But to identify oil palm cultivation as the main cause of smoke haze within Asia  is misleading.  And as we know, misleading information sometimes obscures an effective response."

Lucrative illegal market for crop land a key cause of fires: Researcher CIFOR  Published 28 September 2015 by David Fogarty Assistant Foreign Editor; Dr Purnomo said there is a well- established market for abandoned or conflict land, with land cleared by burning fetching a premium. Using excavators and other heavy equipment to clear the land is costly and time- consuming. "You need to understand that the fire and haze create a lot of money. Quite a lot of money. There is a market for burned land and also it is a way for cheap and quick land preparation for HTI (pulpwood) and oil palm," he told The Straits Times in an interview last week. "Because if you grab the land, the forest - it can be concession land or state land - you can sell it. My research shows that the price is around eight million rupiah (S$800) per hectare. But if you burn that land, the price will increase," he said. "Some people can claim that land and can sell to the network of people. And the buyers can be someone in Jakarta, Bogor, everywhere... It can be 10ha, 20 or even 100ha." Data shows mid-level investors can come from places outside Indonesia, such as Malaysia, he added. According to Dr Purnomo, the price per hectare is US$665 (S$950) after the land is slashed and cut. If the land is burned, the price goes up about US$200 per hectare: a more or less 30 per cent rise. "There is a market for people who mostly prepare for oil palm. You can imagine if they grow the oil palm, after three years, then the price of that land can reach US$3,077 per ha," he said, basing his research on land prices in Sumatra's Riau province.

Norway to complete $1 billion payment to Brazil for protecting Amazon by Green Business  |  Tue Sep 15, 2015 9:52am EDT Norway will make a final $100-million payment to Brazil this year to complete a $1-billion project that rewards a slowdown in forest loss in the Amazon basin, Norway's Environment Ministry said on Tuesday. Brazil had more than achieved a goal of reducing the rate of deforestation by 75 percent, the condition for the payments under an agreement for 2008-15 meant to protect the forest and slow climate change, it said. The remaining cash would be paid before a U.N. summit on climate change in Paris in December, the ministry said. Since 2008, Norway has paid about $900 million to Brazil's Amazon Fund.  "Brazil has established what has become a model for other national climate change funds," Norwegian Environment Minister Tine Sundtoft said in a statement......

13 September 2015: A pick up in deforestation in Brazil and Indonesia? Development versus sustainable palm oil. Will Indonesia new subsidies undermine sustainability policies? Studying conservation policies and impacts on livelihoods. REDD+ probably cannot shift the tide against elite capture of forest benefits.

Editor's note: adds CIFOR DG posting on new data report releases recently on world forests

Trees covering an area twice the size of Portugal lost in 2014, study finds - Palm oil plantations are devouring forests rapidly worldwide, with west Africa becoming the new hot spot for tree loss, Wednesday 2 September 2015 04.00 BST; Data reveals that tree loss in Brazil and Indonesia is on the rise again – by 16% and 30% respectively since 2013 – despite longer term downward trends..

CIFOR DG: Seeing the big picture on the world’s forests - September 8, 2015 This post originally appeared on CIFOR’s Director General’s blog. By Peter Holmgren, CIFOR Director General..... This week we have the opportunity to compare different assessment of the world’s forests. FAO presents the results of the Global Forest Resources Assessment 2015 (FRA 2015) at the World Forestry Congress in Durban. Global Forest Watch has released new global satellite observations of tree cover reductions in 2014. And Nature has published an article describing over 400,000 field plots from national forest inventories that were used to count all of the world’s trees.
o, what do these different studies have to say about the forest resources of the world and how they change?...
Data streams from dozens of sources help companies measure the risk of deforestation in their supply chains by Stacy Collett By Stacy Collett   Computerworld | Sep 2, 2015 3:30 AM PT; Today, about a dozen of the largest commodity traders and buyers in the world use the app.  The Roundtable on Sustainable Palm Oil (RSPO) uses the tool for its alert and fire monitoring system to track fires and deforestation activity.  "Companies who are certified by RSPO had far fewer fire alerts" on their land, says Sanath Kumaran, head of impacts for RSPO in Kuala Lumpur, Malaysia. "During the last six months, only 10 fire hotspots occurred in RSPO-certified [land] compared to over 2,000 total fire hotspots in all other oil palm [land]."...

The Need for Development Is Missing in Defining Sustainable Palm Oil  Posted:  09/04/2015 11:51 am EDT  Robert Hii Sustainable Business Consultant; .... On the issue of carbon emissions, we in developed nations who make up a mere 20 percent of humans worldwide are responsible for a staggering 70 percent of global emissions . Simply put, if the intention to fight climate change on a global front is honest, developed countries including those in the European Union and North America would be mandating how much their citizens can consume. Doing this however, would likely mean high unemployment rates and poverty, which describes life today for millions of people in developing and underdeveloped countries.....In the case of palm oil, we "speak for the environment" by demanding that palm oil be produced sustainably. The popular definition of sustainable palm oil comes from Greenpeace and enjoys wide support by social media activists. Its definition focuses on protecting HCS or High Carbon Stock forests (meaning climate-change-fighting forests) while maintaining the rights of local peoples to either accept or reject palm oil plantations in their communities. The one factor they've failed to address is local communities that may want to clear HCS forests to grow palm oil. What is the solution there? Do we tell these villagers who own a few acres of primary forests that we will not accept any palm oil they grow as sustainable?... In the case of palm oil, we "speak for the environment" by demanding that palm oil be produced sustainably. The popular definition of sustainable palm oil comes from Greenpeace and enjoys wide support by social media activists. Its definition focuses on protecting HCS or High Carbon Stock forests (meaning climate-change-fighting forests) while maintaining the rights of local peoples to either accept or reject palm oil plantations in their communities. The one factor they've failed to address is local communities that may want to clear HCS forests to grow palm oil. What is the solution there? Do we tell these villagers who own a few acres of primary forests that we will not accept any palm oil they grow as sustainable?....

Forestry for a sustainable future – Making a difference beyond agreements 4 Sep 2015 BY Peter Holmgren; ....The WFC is considered the world’s most significant forestry event, organized by FAO every six years together with a host country. At 89 years old, it is also a long-standing tradition within the international community. The first congress was held in Rome in 1926, and Jakarta hosted the 1978 edition. This year, the WFC will be held in Africa for the first time. ..... 

Will Indonesia’s new palm oil subsidy undermine no-deforestation push? 1st September 2015 / Philip Jacobson & Sapariah Saturi - Officials are selling nascent CPO Fund on sustainability grounds, but experts fear it will do more harm than good... • Questions remain about whether the CPO Fund will carry environmental safeguards and how its resources will be divided between its two main purposes: helping farmers increase their yields and subsidizing biodiesel. • A senior adviser to the energy minister worries the subsidy, if administered haphazardly, could throw an unfortunate lifeline to the dwindling market for palm oil from deforestation, peatland coversion and land grabbing. • The man who designed the fund says it's all about sustainability because it will reduce dependence on foreign petroleum and shore up flagging palm oil prices.

Can REDD+ shift the tide against elite capture of forest benefits? Probably not  25 Aug 2015 BY Esther Mwangi, Isla Duporge and Krister Andersson; REDD+ is the largest coordinated international attempt to reverse the trend of deforestation and forest degradation globally. It remains one of the most dominant items on the agenda of the United Nations Framework Convention on Climate Change (UNFCCC)....The lack of evidence from projects where participants are rewarded for performance means that there are few empirical lessons to draw from at this stage in REDD+ development. Criticism has been levied at REDD for unintentionally exacerbating existent inequalities; findings show that when tenure rights (de jure and de facto) are legally defined and secure in practice, this will allow for a more equitable benefit sharing. A recent study using two large datasets explored how tenure rights affect benefit sharing. The first dataset was drawn from International Forestry Research and Institutions and comprises 582 forest   oduct records across 350 user groups in 14 developing countries in Africa, Asia and Latin America. This work shows that where collective rights for harvesting forest products are secure, the benefits of these products are more equally distributed among participating individuals. However, this finding is dependent upon the level of ethnic diversity within the harvesting group. Where there are higher levels of ethnic diversity, lower equity is found in benefit distribution and vice versa. This implies that REDD+ projects in areas with high ethnic diversity need to enforce additional measures to prevent elite capture by privileged ethnic groups. ...

Multiple ways for Congo Basin forests to flourish and deliver: study  24 Aug 2015 BY Harry Pearl; ...Providing forest users with clear incentives to work together could reduce conflict and improve the management of Central Africa’s timber concessions, according to a new study....
Canopy commerce: forest conservation and poverty alleviation, Published 03 Feb 2012; Innovative approaches for protecting the future of Sierra Leone’s Gola Forest – globally important for its biodiversity and its carbon reserves – are being developed by a collaboration of conservation agencies and University of Cambridge researchers. Our goal is to find a mechanism by which richer countries can help one of the poorest countries in the world protect its nature at the same time as improving the livelihoods of the local communities. Dr Jeremy Lindsell (RSPB) Gola Forest, situated at the westernmost tip of a once extensive swathe of forest that stretched a thousand kilometres from Sierra Leone to Togo, is classified as a biodiversity hotspot of global significance. Its 71,000 hectares are home to over 330 species of bird, including the rare White-necked Picathartes and Rufous Fishing Owl, more than 500 species of butterfly, and a long list of threatened and endangered plants and animals...After a return visit for a follow-up survey, the researchers are now analysing the data, with results expected early in 2012. “All in all, the project will provide the first detailed formal policy evaluation of a major conservation programme,” said Kontoleon. “The results should allow us to derive reliable inferences on the livelihood and behavioural impacts of conservation policies.” - See more at:

Indonesia's new Plantation Bill (update 9): Sime Darby Indonesia plantation listing / spin off?

2 November 2014: Sime Darby Indonesia plantation listing / spin off?

It will not be surprising under Indonesia regulatory and economic nationalistic climate to see several foreign-owned plantations interested in domestic listings / spin offs.

Sime Darby may spin off Indonesian plantation assets Posted on 27 October 2014 - 05:39am; PETALING JAYA: "Sime Darby Bhd, which in the midst of talking to investment bankers to list its motor division in Malaysia, is considering listing or spinning off its Indonesian plantation assets in Indonesia next.... "This move could come in the form of an initial public offering (IPO) or a reverse takeover (RTO)," said RHB Research analyst Hoe Lee Leng...  Sime Darby told investors at Invest Malaysia Hong Kong (IMHK) recently that it is the group's strategy to continue to contemplate various options, including spinning off/listing its core divisions.... How said the listing or spin off of the Indonesian plantation division could potentially be in the form of a tie-up with an Indonesian partner which has a sizeable plantation landbank, which would be injected into a listed entity.... "This would help the company, as the Indonesian government has limited ownership by foreign companies to no more than 100,000ha of plantation landbank per company, as this ruling is not applicable to listed entities (presumably listed in Indonesia).... "A listing on the Indonesian exchange would also bode well for Sime should the Indonesian Government tighten regulations with regards to the foreign ownership of land," Hoe said...".

6 October 2014. Likely facing pressure for future Indonesia-listings, plantation interests point to problem of domestic funding - higher capital costs
Businesses breathe sigh of relief on new law by The Jakarta Post, Jakarta | Business | Fri, October 03 2014, 8:31 AM; "Plantation industry players breathed a sigh of relief as the House of Representatives canceled a plan to cap foreign ownership in local plantation firms at 30 percent.,,, Indonesian Palm Oil Producers Association (Gapki) executive director Fadhil Hasan also welcomed the new law as it handed over the determination of the cap level to the government.“We expect the government regulations to also [limit foreign ownership based on] the type of commodities or crops,” he told The Jakarta Post....... Understanding the government and the House’s intention to protect local and smaller companies, Togar Sitanggang, chairman of the Indonesian Oleochemical Manufacturers Association (Apolin), said most domestic plantation firms were either owned by foreign-listed companies or controlled by one or more foreign shareholders.Expensive financing from domestic banks was the main reason that forced local plantation firms to be listed abroad or to find foreign suitors, said Togar, who is also a senior manager at biofuel maker PT Musim Mas, citing Golden Agri-Resources Ltd., which owned Sinar Mas Agro Resources and Technology (SMART) and Bumitama Gunajaya Agro of the Singaporean-listed Bumijaya Agri Ltd. as examples...."

30 September 2014. Foreign limit will be set by regulations.

New plantation law limits foreign ownership by The Jakarta Post, Jakarta | Business | Tue, September 30 2014, 12:01 PM;; "The House of Representatives on Monday passed the plantation bill, which sets stricter rules on foreign ownership in the plantation sector so as to prioritize smaller local investors.... The limitation is to have no specific percentage value, although the House’s Commission IV has previously demanded a 30 percent foreign ownership cap. Instead, the law allows the central government to limit direct foreign investment in Indonesia’s growing plantation sector.... through government regulations (PPs). The limits, according to the new law, are to be based on the type of crop, the size of the producing company and certain geographical conditions.... A strict foreign ownership cap would discourage foreign investment in the upstream plantation sector, but a less stringent one, made general by the new law and specified by a PP, would be acceptable, according to the Agriculture Ministry’s director general for plantations, Gamal Nasir... The existing foreign plantation companies will be required to comply with the new law after their period of licensing of rights to cultivate land (HGU) has ended, the law stipulates....  The new law also regulates the scope of plantation areas and land concessions according to a number of variables, such as the type of crop grown, the company’s factory capacity, the area’s population density and certain geographical conditions. These points too will be detailed in PPs.... The central government will also have the right to turn over state-owned forests and abandoned plots of land to plantation owners. But the law also requires plantation owners to conduct discussions with indigenous residents over plots of lands to be acquired.... In order to develop the sector, the law also encourages cooperation in research and development between foreign and domestic individuals, businesses and universities, as well as between central and regional administrations.... Firms have been given five years to comply with the new law....  While praising some points of the law, such as the foreign ownership restriction, Indonesian Rubber Association (Gapkindo) chairman Daud Husni Bastari said the law did not properly support smallholders and criticized the lack of measures to mainstream the smallholder basis of plantation management...."

"Indonesia passes plantation bill but..." by CIMB September 30, 2014 says that "We are slightly surprised that the bill went through despite the tight deadline. However, we are not too surprised that the 30% foreign limit rule was omitted given that it could significantly hurt future foreign investment in Indonesia. Overall, we view the latest news to be slightly positive for Malaysian- and Singapore-listed plantation companies as they will be able to maintain their existing stakes in plantation assets in Indonesia. However, we expect Malaysian planters to be more cautious about future expansion in Indonesia in view of the foreign ownership risk...."

29 September afternoon. It's the day for the Indonesian Parliament to vote on the new Plantation Bill. As expected, Jakarta sources confirm that the worrying 30% foreign ownership limit article is dropped. We'll have to check out the final version in detail for all the regulatory shifts to come.

16 September afternoon. More reader feedback on Plantation Bill, SGD 1.95 million fines for role in Riau fire, forest boundary 5-year limit for complaints?

Feedback from another senior industry manager in Jakarta on the strike off of the foreign ownership clause from the upcoming Plantation Bill: "Thanks for the (Kontan) newslink. The discussion is on going and not yet decided...."

Malaysia reader points out: Is it off? I am not sure. My sources tell me the only thing changed is that the figure of 30% has been removed and will not be legislated. So, is it then open ended? Who then will have the power to decide the level? This is even worse than before if it stays open ended.
All other changes are still going to go through? 

Another Jakarta reader highlights this news link: Pembatasan Kepemilikan Asing Dicoret; Kontan  | Selasa, 16 September 2014; Hasil rapat dengan pemerintah dan DPR memutuskan mengeluarkan aturan maksimum batas kepemilikan asing di RUU Perkebunan; which talks about Minister of Agriculture Suswono seeking a delay to the Plantation Bill, and noting that policy for palm oil should be distinguished and separate from other crops....

Plus an alert from a reader based in Singapore: On the issue of fire, have you seen this,; "...The Pelalawan District Court in Riau sentenced ADEI general manager Danesuvaran KR Singam to a year in prison and the option of paying Rp 2 billion (S$210,000) or serving an additional two months in jail for violating Article 99 (1) of the 2009 Environmental Protection and Management Law. "The defendant was negligent in his supervisory role of the estate. He should have actively prevented irresponsible parties from slipping into the estate and setting the fires," presiding judge Donovan Pendapotan said. Danesuvaran, however, was not sent directly to prison after the hearing. "We need to wait for a final and binding verdict from the Supreme Court before sending the defendant to prison," said prosecutor Banu Laksmana, adding that the prosecutors would appeal the sentence. The court found ADEI guilty of violating the same article in the 2009 law and handed down a Rp 1.5 billion fine or see its director, Tan Kei Yoong, serve five months in jail. The court also ordered ADEI to pay an additional Rp 15.1 billion to repair the environmental damage caused by the forest fires...." **Total fines and repair charges for the fire = Rp 2 + 1.5 + 15.1 billion = Rp 18.6 billion or about SG$1.95 million?

Other regulatory news:
  •  TATA BATAS HUTAN - Kuntoro: Jangan Berubah Terus; Kompas | Selasa, 16 September 2014; the process of affirming Indonesia's forest areas is now said to have reached 68% but under current regulations, the boundaries can still be adjusted for complaints without time limitation. Thus, UKP4 (Presidential Working Unit for Supervision and Management of Development) has suggested a time limit for five years to reduce this uncertainty for the public, government and development interests.

16 September morning. Troublesome foreign limit clause cut amidst heavy contestation? The Plantation Bill's worrying foreign ownership clause was strongly opposed by plantation business groups (several very large ones are foreign-listed in Malaysia and Singapore). However, Jakarta news report that others such as rubber producers (dominated by smallholders) point out insufficient smallholder support in the Bill and suggest the need for land reform to favour this group. The divergence between big business and domestic sentiment is increasingly apparent. Interestingly, I had a chat yesterday with an analyst familiar with the Jakarta banking sector; and he also noted the strong support for foreign ownership limits and selldowns among professionals in that sector. This is akin to the sentiment held by domestic Indonesia professionals within the plantations sector too.

Just earlier this morning, I received via a senior Malaysia plantation manager a news alert that reads positively for Indonesia plantation FDI i.e. the removal of the contentious clause: "Parliament and government have agreed on the withdrawal of foreign ownership limitation. In the final discussion of Agriculture law revision No. 18/2014 that was held yesterday, Parliament and government have agreed on the withdrawal of 30% foreign ownership limitation...." (attributed to Kontan, which I could not find online earlier - but since updated for 12 noon by reader (thanks Ibu Y) its location here:; "Plantation business players are now able to breathe - Commission IV decides to eliminate the foreign ownership limit points of at least 30 %.. and quotes Vice Chairman of Commission IV Herman Khoiron on Monday 15 September on worries on foreign exchange, investment and ability of domestic business to replace foreign capital). However, on checking with a Jakarta source closely linked with the Indonesia Parliament this morning, the reply was that the clause has not been removed yet. Thus, the status of this clause has been quite contested?

Obviously, the Bill is an increasingly heated topic as Parliament is reported to have set 29 September 2014 as the date for its ratification at its plenary meeting. There are many clauses that adjust current business regulations - including the wide definition of "group" of companies for the ownership ceiling. Experts also point to a little known land ceiling adjustment in the Land Bill, and also new policies within the Native Customary Rights Bill.

Earlier news headlines:

Business groups oppose plantation bill by Linda Yulisman, The Jakarta Post, Jakarta | Business | Fri, September 12 2014, 7:39 AM, JAKARTA. "Plantation business groups have voiced their criticism toward the plantation bill, which is now in final deliberations at the House of Representatives, saying that it will hurt the business climate for plantation firms as well as growers. The bill, a revision to the 2004 Plantation Law, comprises restrictions on foreign ownership and the scope of plantation areas, stipulates punishment for land burning and encourages more local engagement. The House expects to pass the bill later this month... Indonesian Palm Oil Producers Association (Gapki) executive director Fadhil Hasan said on Thursday that the group strongly opposed the 30 percent foreign ownership cap as it would erode Indonesia’s competitiveness as an investment destination in the sector... Apart from capping foreign ownership shares, the bill also restricts land ownership by a plantation group to a maximum 100,000 ha. It also requires plantation firms to cooperate with growers by allowing them to hold a 20 percent share... The bill also requires local processing industrial firms relying heavily on imported raw material to open plantations to support their operation. For instance, a sugar refiner sourcing raw sugar overseas will have to build its own sugar cane plantations within three years of its operation... It also gets tougher on plantation owners or growers that commit land burning by imposing legal punishment on them... While appreciating some key points of the bill, such as the foreign ownership restriction, Indonesian Rubber Producers Association (Gapkindo) chairman Daud Husni Bastari also raised his objections, particularly with regard to the bill’s weak support for small holders and lack of measures to mainstream the smallholder-based perspective in plantation management. “What we need is land reform, which the bill still lacks. We also don’t see that the bill sufficiently sides with smallholders who should play a dominant role in managing plantations,” he said. Daud further said that the bill should have provided a specific land arrangement for smallholders the way Malaysia did with its authority for smallholders, the Rubber Industry Smallholders Development Authority (RISDA)..."

Plantation, property firms oppose land bill over expansion plans by The Jakarta Post, Jakarta | Business | Wed, February 26 2014, 12:03 PM; "House Commission II member Budiman Sudjatmiko said that the capping was necessary to help prevent unjust land distribution. “This bill is a breakthrough as it would end land conflicts, which are mostly caused by unjust land distribution.”  Budiman quoted data from the National Land Agency (BPN) showing around 56 percent of national assets — 80 percent of which was land — was controlled by only 0.2 percent of the population."

9 September. SBY wants to crush proposed foreign ownership clause? His view was not known earlier (Jokowi did a slightly discouraging side stepping) and it was highly likely that there would be lobbying on this multi billion dollar matter.

Reuters cited Indonesia’s investment chief as saying that the president is against a draft bill that would retroactively limit foreign ownership of plantations at 30% as it may expose the government to legal action. According to the article, lawmkers and the government are at odds as to whether the law should be retrospective. The Chairman of Indonesian Investment Coordinating Board said that the guidance not to include an ownership limit was under the instruction of the President (summary from Ambank news alert)

Reuters news article:

26 August evening. I had a second high level industry meeting over dinner. I've also spoken to two seniors in the financial sector in the last two days; not surprisingly they are concerned about definitions and impact on foreign investor sentiment.

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The new Plantation Bill has been about two years in the drafting. Today, I have confirmation of yesterday's view that there is broad political consensusï among the legislators for the foreign ownership limit clause. However, there's little time left in this Parliament. This clause and other key revisions of concern to plantations include the land ceiling for a single company or group of companies (the definition of "group" talks about ownership and management relationships; rather than minority or majority stakes), the inclusion of plasma within the HGU and customary rights. The consensus arises from the amendments being made to aid the "rakyat kechil" (the people): apparent concerns over social conflicts and land for rural folk. There are three major bills being handled by Commission #4 - the Plantation Bill, the Land Bill and Customary Rights Bill.

I guess we know for sure by the end of September on the foreign ownership clause (and the rest of the Plantation Bill), or unless there are changes before then. The views from Malaysia are that it is unlikely for the foreign ownership limit ruling to pass, and if it does, there is hope that the new government will reverse it. There is also hope for a fair middle ground with no retrospective element i.e. no sell down for existing foreign owners. However, it is not clear how these hopes are being represented to the Indonesia legislators. It may be up to individual company lobbying among the key 20 legislators involved?

25 August evening. Jokowi side stepping question on proposed foreign ownership limits to Malaysia newspaper (see below)? I'm in Jakarta for three days. Getting some useful updates and political context to Indonesia regulatory changes and Jokowi-JK policy ideas from industry sources and seniors in the financial sector here. The views I'm hearing here seem different from Malaysia sources (even those with work / business here). The key question I'm asking is: what's the political consensus? I'm also getting some feedback on issues from bankers looking at their plantation portfolios.

Note: On Plantations the proposed limit is 30% with a 5 year adjustment (sell down) period and for financial services, it's 40% with a 10 year adjustment period. Jokowi points out that FDI is needed in these sectors: tourism, infra (build ports, airports and railways) and manufacturing.

Jokowi going for moderation by wong chun wai; Updated: Monday August 25, 2014 MYT 8:25:09 AM;

"> Malaysia-Indonesia relations and international trade. During your election campaign, many observers were concerned with the tone of presidential candidates playing the nationalist cards on the economy and Asean.  Can you clarify what are your investment policies, specifically on equity in financial services and plantations?

I am aware that there are domestic political pressures to limit foreign expansion, including in the financial services and plantations sectors. Still, to ensure future rapid economic growth we need massive investment and if domestic capital is not sufficient, then we will have to look abroad. It is my task as President to balance out these pressures. My commitment to the Indonesian people is to create economic growth and jobs. We need investments for tourism, infrastructure and manufacturing. We need support for the building of ports, airports and railways."

19 August 2014 afternoon. Thanks to several readers for discussing this new proposed bill.

An Indonesia policy analyst notes that the Indonesia media has not ran with this story since Reuters broke it on Friday. This may be regarded as maneuvering by the outgoing legislators as the draft bill (RUU) is apparently not in a format ready to be passed. The RUU corroborates the Reuters report, but conditions for foreign investment appears unrefined and includes a clause allowing foreign investment in the sector only if it involves new technology (Article 70).

There are doubts this can be enacted in the short-term, especially in its current draft. Bloomberg reports that Parliament has not tabled it yet as it hasn’t received a letter from the President. However, there is a rush to table this before the next administration comes in. If not, the new parliament will have to redraft the bill (newslink: Aug. 19 (Bloomberg) -- Bloomberg’s Alia Karenina reports on a draft bill by Indonesia’s government that would limit overseas land investment in the nation to protect small business. She speaks on “On The Move.”

Indonesia business consultants note that Jokowi is generally pro-business and pro-investment, and that his key priority is to lower fuel subsidies and to boost state income with tax reforms. Thus, as economic and fiscal status is the priority, some think that foreign investments limits would not be a priority at this point. A bigger concern for natural resource concessionaires (plantation, forestry and mining) will be stricter environmental regulations, tax compliance and such.

19 August 2014 morning

Khor Reports comment: This has been percolating for a while. I last spoke to friends in Indonesia palm oil about this back in March. We'll have to look into the details, including the schedule for the Indonesia Parliament vote on this bill and understand what discretion the incoming Presidential administration will have if it happens to be passed before the new President is installed (assuming Jokowi-JK have a differing view on this, which remains to be determined). If this is found to be the political consensus*, then as always, implementation and the details are everything. The 2009 changes to the mining bill were fundamental but were only strongly rolled out for implementation in 2013 (much to the surprise of the mining sector!). There are already retrospective foreign ownership limits with 4-year sell downs in place for the Indonesia horticultural sector. Also, many will recall Malaysia's own history and policies on such limits which may prove awkward in counterarguments. Analysts note that many Malaysian plantations** will be badly affected if this policy is put in place.

*We may want to note the wide readership that Thomas Piketty's "Capital" is getting among political economists and policy makers; While it is generally pooh-poohed among international capitalists and mainstream financial media, it offers much grist for the mill of nationalistic policy makers on the fallacies of foreign ownership.
**For a breakdown of foreign plantation group exposure in Indonesia, check out AmBank's 14 August 2014 report.

Our other postings on this topic with some contextual information and recent Malaysia investor sanguine views:
  • At the sidelines of POC 2014: (1) on new Indonesia regulations (update), /khorreports-palmoil/2014/03/at-sidelines-of-poc-2014-1-on-new.html: "The number one producer of palm oil in the world has been making some speedy and decisive changes in policy in the last few years. A key example was the deployment of the new biodiesel policy.... The advancing proposal for a 30% foreign equity ownership limit (revision of Law No. 18 Year 2004 on Plantations) in Indonesia was talked about. Could this happen before the end of the current Presidential term this year?...
  •  Interview #2 Presidential race heats up, foreigners worry? /khorreports-palmoil/2014/07/interview-2-presidential-race-heats-up.html; "...some Malaysia investors seem relatively sanguine about business regulatory changes. They note that while the candidates may sound more nationalistic in campaigning and new regulations may seem tough, the implementation usually ends up more practical and business-friendly...."  


New Indonesian plan to limit foreign ownership will hurt Malaysian firms by yvonne tan, updated: Tuesday August 19, 2014 MYT 7:18:05 AM; "Malaysian planters will be the biggest losers if Indonesia decides to restrict foreign ownership of plantation companies there to not more than 30% from the current 95%... “The proposal will have the biggest impact on Malaysian-listed companies, as most of them have gone into Indonesia in a big way and are highly dependent on Indonesian operations for future growth,” UOB KayHian Research told clients in a report... Some of the local companies with Indonesian operations include Sime Darby Bhd, Kuala Lumpur Kepong Bhd (KLK), Felda Global Ventures Holdings Bhd, IJM Plantations Bhd and Genting Plantations Bhd... Nevertheless, analysts pointed out that it was still early days for the policy, with Indonesian lawmakers still studying the possibility of limiting foreign ownership in the plantation sector.
Affin Investment Bank has maintained its “overweight” call on the sector for now... “It remains to be seen if the new Indonesian administration (led by Joko Widodo) will agree to the Bill as well as the foreign ownership limit, which is also being considered for other sectors, including banking and mining.” The investment bank suggests that Malaysian planters could consider mergers with Indonesian peers to reduce equity stakes in response to the new possible measure..."

Indonesia lawmakers draft bill to slash foreign ownership of plantations By Michael Taylor and Yayat Supriatna; JAKARTA  Fri Aug 15, 2014 3:04am EDT; Aug 15 (Reuters); "Indonesian lawmakers are looking to restrict foreign ownership of plantations to no more than 30 percent, as the top palm oil producer tries to maximise land usage, protect indigenous people and tighten environmental controls in the sector....Indonesia's parliament is looking to finish discussions on the draft bill with the government soon and expects it to be approved before the new administration is in place, Gamal Nasir, director general of plantations at the agriculture ministry told Reuters....
If the draft bill becomes law, it would be retroactive for companies that already own plantations, said Herman Khaeron, an influential lawmaker and vice chairman of the parliamentary committee for agriculture, forestry, fisheries and maritime... This interpretation was rejected by agriculture ministry and industry officials. Firms would be given five years to comply with the new bill, according to a copy of the draft seen by Reuters, and those that refused to comply may face fines, temporary suspensions or the revoking of licenses...."


Felda Global IPO revisited (update 1)

21 September 2014: Lots of talk about Felda Global / FGV share price among KL share market observers. It recently fell to a low of RM3.46/share. Notably below even the most pessimistic view (Macquarie - see below) at the time of its IPO in mid 2012. The 52-week share price trading range: 3.460 - 4.700.
source:, 19 September 2014
13 July 2012: Credit Suisse issues report on Felda Global, 12 July 2012: "We initiate coverage on Felda Global Ventures (FGV) with an UNDERPERFORM rating and a target price of RM4.90, a potential downside risk of 11%. There are far better choices—younger age profile with more attractive valuations—in the region. We prefer Genting Plantations and Sime Darby in Malaysia, London Sumatra and Salim Ivomas in Indonesia.... Positives: large, leveraged to palm oil prices, fast-tracked to the indices, net cash position, clear dividend policy and a turnaround plan for downstream... Negatives: Old with falling yields, low profitability, minimal organic growth, potentially less transparency, 1QFY12 results have halved... Expensive and fully valued at CY12 and CY13 P/Es of 16.9x and 17.4x respectively..."

Source: Credit Suisse

Khor Reports Comment: This is the second "underperform" rated report on Felda Global by an investment broker that we have seen. Another report, issued by Macquarie Equities Research on 29 June 2012, gives a price target of RM3.85.

Singapore’s Transboundary Pollution Bill – Prospects and Challenges by Helena Muhamad Varkkey

Last June saw Singapore battling with its most severe episode of haze yet. During that period Singapore’s Pollutant Standards Index hit the all time record high of 401. This event ignited a diplomatic row between Indonesia and Singapore, with Singapore’s Ministry of the Environment and Water Resources , Dr. Vivian Balakrishnan almost immediately accusing Indonesia of not caring about the welfare of its neighbours. It was also around this time that Dr. Balakrishnan first revealed plans to table a Transboundary Pollution Bill that would provide for criminal and civil liability for any Singaporean or non-Singaporean entity causing or contributing to transboundary haze pollution in Singapore.

The Draft Bill
A draft version of the Bill has now been released, and the Ministry of the Environment and Water Resources is seeking the views of the public on this draft. The consultation period will last until 19 March 2014, before the bill is reviewed and tabled at Parliament. Dr Balakrishnan hopes to have the Bill passed within the first half of this year.

The Bill is unique for its application of extra-territoriality; it covers the operations of all Singapore and non-Singapore entities whose activities outside of Singapore contribute to haze pollution in the city-state. The Bill would be the first of its kind for Singapore, as Singapore usually only punishes action overseas only for severe crimes, such as corrupt acts or illegal sex with minors. It will also be the first of its kind in the region and the world, as there is currently no law in the world that allows a country to prosecute commercial entities in other countries for such offences. Currently, the only way to catch entities based overseas is if somebody in the entity’s management position comes to Singapore.
The Bill makes it a criminal offence when an entity engages in conduct, or authorizes any conduct which causes or contributes to haze in Singapore. A penalty of up to SGD300,000 can be imposed, and this may be increased up to SGD450,000 if the entity has deliberately ignored requests by authorities to take appropriate action to prevent, reduce, or control the pollution. An individual company officer can also be held personally responsible.

Affected parties may also bring civil suits against errant entities. The civil damages recoverable under the Bill will be determined by the courts of Singapore based on personal injury, physical damage, or economic loss. Civil action can also be taken against errant entities by industries (such as aviation, tourism and construction) if they can prove that they have suffered serious economic consequences.
Presumptions allow the court to assume that a fact is correct until prove otherwise. Since proving what happens abroad is difficult, evidential presumptions relating to causation (linking open burning elsewhere and wind direction with the presence of haze in Singapore) and culpability (based on ownership and occupation of land) have been inserted, and help to give teeth to this Bill. Among others, it importantly allows for reliance on satellite imagery, meteorological information, and maps as evidence.

The presumptions put the burden of proof on entities to provide a rebuttal through their own land maps. Hence, a company can defend itself by proving the fires were caused by natural disaster or by parties not under its direction. Showing that the concession maps used by the authorities are wrong can also rebut the presumption.

With companies having to prove that they are not liable for the haze, they should feel more pressure to be transparent and responsible. Hence, this new Bill should  incentivize companies to be more forthcoming about their landholding and practices, especially with regards to sharing their internal land maps and concession maps with authorities. This has been a long-standing problem between the firms and authorities, and this shift in the burden of proof could potentially resolve this issue once and for all.  

Academicians have also pointed out that the Bill would surpass the diplomatic need of going through government channels when faced with wrongdoing. Professor Simon Tay of the Singapore Institute of International Affairs said that since the proposed law allows individual lawsuits against companies, it will be able to bypass any ‘friction’ that might occur of the matter has to go through governments. As governments have usually resorted to diplomatic consultations with home countries when foreign companies were suspected of burning, most of these cases were resolved diplomatically and not legally. Environmental Law professor Laode M. Syarif from Hasannudin University added that the new law will also be able to address criticisms that Singapore is lenient towards suspected companies that are headquartered in Singapore but operate in Indonesia. It could also stop Indonesians from using the excuse that Singapore-linked companies get away with environmental destruction in Indonesia.
Prof. Tay also foresees potential positive developments among financial lending practices if this Bill is put into place. With the new law, banks would become more careful when approving loans to companies since these financial institutions would not want to expose themselves to more risks of civil or criminal liability. There are already some banks who evaluate loans based on sustainability and reputational risk, but these remain the minority.


However, identifying errant companies may be problematic. One Singaporean Member of Parliament pointed out that the National Environment Agency would need to work closely with their counterparts in Indonesia to build a case against these companies, and questioned if the authorities would be able to work well together effectively. Indonesia has thus far shown a weak track record; clearing land through burning is prohibited in Indonesia but authorities have so far only successfully prosecuted a handful of companies for starting such fires. Enforcement of land clearing laws is weak in Indonesia due to lack of skilled ground staff to assess remote areas. Furthermore, corruption is rife in Indonesia, and companies have been able to continue to burning large tracts of forests every year, clearing it for planting trees for palm oil or paper production. Efforts on the Singaporean side must be matched by equally strong measures from the Indonesian government, for errant companies to be brought forward to face the music.
Once these companies are brought to court, building a case against these companies would be an equally challenging proposition. One lawyer explained that with criminal liability, it would be difficult to prove causation or contribution of conduct to haze pollution in Singapore. The prosecution would have to prove beyond reasonable doubt  that haze pollution at least partially came from that fire. That would entail considering how thick the smoke was and whether the smoke from that fire actually travelled to Singapore.
With civil cases, a claimant would have to show on a balance of probability that his personal injury, disease, mental or physical incapacity of death is a consequence of the defendant’s conduct. This may prove difficult as firstly, there may be a time lag between the haze and the personal injury. Secondly, haze may be only one among several other contributing factors to the injury. Also, the defendant’s conduct may have only resulted in one or a few fires relative to the total number of hotspots at the time. How would the court attribute the proportion of the defendant’s responsibility?

Of course, culprits may exploit any loophole to demand if the haze is indeed caused by them. For example, associate professor Burton Ong of the national University of Singapore suggests that entities might claim that they had no control over sub-contractors who start the  fires. This is a common reason given by companies when confronted by authorities.

Legal experts recommend that a thorough exploration of the nature of the liability arising from the acts of independent contractors used by firms to clear land. They suggest that ‘strict liability’ clause should be applied, wherein the harm caused (the impact on public health and economic liabilities)justifies a non-delegable duty of care. Hence, in such cases companies can no longer claim that they are not responsible for the actions of their contractors.

Other commentators also suggest increasing the severity of the punishments suggested, as the current proposed fines are too low to cause any real damage to the multi-billion dollar companies that operate in Indonesia. Suggestions include a demotion in the status of companies, compulsory reforestation projects, compensations to the victims of haze, seizing any assets the entities may have in Singapore, and even prohibitions from doing business in Singapore. Nanyang Business School professor Ivan Png further suggested that penalties be proportional to the land area a defendant owns.

To address the issue of the difficulty of compiling evidence, professor Ang Peng Hwa at the Nanyang Technological University proposed that NGOs like Greenpeace should be encouraged to work closely with authorities, including providing the authorities with what evidence they have compiled from their own investigations. Professor Png also also suggested that the law include an incentive for whistleblowers to provide evidence.

It is hoped that this Bill will send a strong signal of deterrence to potentially errant companies, especially considering the damage that could be inflicted upon the company of it was publicly exposed that it conducts itself in such an irresponsible behaviour. In relation to the bill, a spokesperson for First-Resources, a Singapore-listed company, said it will support any move to hold those directly responsible for contributing to the haze. Golden Agri Resources reaffirmed their view that businesses must act responsibly, however Asia Pacific Resources International (APRIL) declined to comment on the bill until it has had time to review it. In general, it can be seen that major companies are paying attention to the new developments in relation to the proposed Bill, and can be expected to take the necessary steps should the Bill come into force.

As a whole, the Bill shows that Singapore is willing to take action where it can. Public views so far has been generally supportive, and environmentalists and observers have lauded the proposed legislation as a good step forward in tacking the haze menace. If passed, the Bill will definitely be an interesting test case to explore the effective reach of extra-territoriality in transboundary pollution issues.  Furthermore, if passed, the Bill would indirectly put pressure on Indonesia to step up its own efforts to resolve the haze problem.

Newspaper articles, official government websites and commentaries by various stakeholder organizations and think tanks.

About the contributor

Helena Varkkey, PhD Sydney
Senior Lecturer, Department of International and Strategic Studies, University of Malaya. Deputy Editor, Malaysian Journal of International Relations. Research focus: transboundary pollution in Southeast Asia, particularly pertaining to the role of patronage in agribusiness, especially the oil palm industry, and its link to forest fires and haze in the region. Website:

Felda Global leaps to "target" and 12% cash-in? (correction)

Khor Reports notes and comments: 

The opening push on Felda Global took the stock to RM5.46, a whisker below the RM5.50-6.00 range that market experts mentioned over a month ago to Khor Reports as the “hoped for” target; as we reported in “FELDA SETTLERS & THE FELDA GLOBAL IPO – a socio‐political perspective” dated 22 May 2012. 

Felda Global's shares closed the day at RM5.30, for a gain of 19% on the RM4.45 per share price for the public (institutions paid RM4.55)#. At this price, its earnings valuation is 15.7x, compared to 17.5x for KL Kepong, 14.4x for Sime Darby and 9.5x for Golden Agri. 

On a day when RM2.8 billion worth of securities were traded on Bursa Malaysia, RM1.5 billion was in the plantation sector. Felda Global was enjoying its debut, and it generated a huge value traded of about RM1.4 billion, or half of the Malaysian bourse's activity. It's not yet part of the FBM KLCI index of 30 stocks@, but it is expected to enter in the future. Among the largest Malaysian plantation stocks, Felda Global's RM19.3 billion market capitalization currently puts it behind KL Kepong with RM24.5 billion, but ahead of PPB Group (which has a key stake in Wilmar International) with RM18.8 billion.

Holders of shares from the offer for sale and the public issue will be sitting pretty with gains in excess of RM1.4 billion today, with about 12% trading their holdings on the first day, locking in gains of some RM170 million.

However, a Reuters news article raises questions about how the shares in Felda Global were allocated. It quotes: "This Felda IPO is an embarrassment," said an official with a Malaysian bank-backed fund management firm. "About 23 percent of the book was allocated to 'friends and family', all at the expense of legitimate investors with potential synergies."  

The share allocation by Felda Global is summarised in its IPO prospectus in the table below, but there is little information yet on total shares allocated to key executives and details of major shareholders.

#Correction at 11.20am on 29 June 2012, of 2nd paragraph on retail and institutional price, so that the gain is 19% not 16.5% on retail IPO price.

Some news reports:

The Edge Malaysia: "FGV is the third largest planter in the world after Sime Darby and Singapore-listed Golden Agri-Resources Ltd. As a yardstick, Sime is currently trading at an average of roughly 14.4 times estimated earnings for 2012/13, and Golden Agri at 63 Singapore cents is valued at 9.5 times estimated earnings for 2012 and and 8.8 times for 2013."


"The strong debut beat market expectations of a first day pop of 10 percent and brushed aside, for now, a widely flagged 36 percent drop in Felda Global's first-quarter profit to 223.2 million ringgit ($70 million) that unnerved some investors."

"To keep the farmers happy, government-linked funds and the domestic pension fund, which accounted for part of the institutional tranche, made a rush for the stock during the book-building process."

"This Felda IPO is an embarrassment," said an official with a Malaysian bank-backed fund management firm. "About 23 percent of the book was allocated to 'friends and family', all at the expense of legitimate investors with potential synergies."

Reuters news feature, "Malaysia's Felda surges 20 percent in debut of world's No.2 IPO,"