Following a decade of international commitment to combat illegal logging and with a new global understanding of the potential of forests to mitigate climate change, good forest governance and management has never been so important.

With the world’s highest rate of deforestation, Indonesia has taken significant steps in its “war on illegal logging” having dramatically reduced illegal timber exports following a spate of enforcement operations. Much of this improvement in basic forest governance has coincided with a wider clamp down on uncontrolled corruption in the country, as the arrest of West Kalimantan’s senior police and forestry officials recently in Ketapang demonstrates.

However, signs are emerging that a wave of national and foreign investment in Indonesia’s booming plantations sector could mean the lessons learned on illegal logging are being forgotten. Indonesia’s powerful and well connected illegal logging barons, few of whom have been seriously investigated let alone convicted, are again hijacking the country’s forests as they re-invent themselves in the plantation sector’s “green gold rush”.

On 30 March, Indonesia’s agriculture minister, Anton Apriantono, was flown to Lamandau in Central Kalimantan to grace a ceremony for a new 2,000 hectare oil palm plantation. The minister’s flight was laid on by Suryo Paloh, chief advisor to Golkar – Indonesia’s dominant political party. Paloh’s Metro Group and Abdul Rasyid’s Tanjung Lingga Group hope to establish 40 to 60,000 hectares of oil palm plantations in the area. The ceremony was also attended by the governor of the province, Teras Narang, a former head of law enforcement in the national parliament.

The Government seems to have forgotten that in 2000 the country’s Ministry of Forestry publicly named Rasyid as one of Indonesia’s biggest illegal logging barons. For a decade, Rasyid’s Tanjung Lingga Group has been accused of rampant illegal logging of ramin wood in national parks, major international log smuggling, and the kidnap and assault of EIA and Telapak investigators. Through his illegal logging activities Rasyid built a small fortune of at least $30 million a year, allowing him to buy political influence and protection by corrupt officials. Rasyid and other timber barons across the country helped Indonesia earn the world’s worst reputation for forest crime.

EIA is calling for an urgent inquiry into how a notorious criminal’s move into palm oil plantations has been backed by the highest levels of government – while the country is wooing multi-billion dollar forest conservation funding for climate change mitigation.

Millions of hectares across Indonesia are being staked out by companies seeking land, preferably forested, for plantations of oil palm and other crops such as jatropha, sugar cane, cassava, and soya beans. These companies are betting on increased demand for bio-fuels, and are competing with investors seeking huge timber estates to feed pulp and paper, plywood, flooring and furniture industries.

Key amongst these is a spate of huge land deals being negotiated in Papua, in a process woefully lacking credible transparency, consultation or oversight.

Such deals cannot be separated from political and human rights tensions, occurring as they are in the legal ambiguity generated by the lack of implementing regulations in the province.

A major player in Papua is PT Agro Resources and Technology (PT SMART), part of the Sinar Mas group of companies, which also controls Asia Pulp and Paper (APP), a firm accused of illegal activities in Sumatra. PT SMART is targeting over a million hectares for oil palm plantations in Papua province’s remote south, and has set up a string of subsidiaries to circumvent laws restricting how much land one company controls. In late 2007, the Mayor of Merauke released 300,000 hectares for PT SMART, and pronounced that a further 4.5 million hectares of land are available – more than half of Indonesia’s current oil palm plantations stock.

Another player is Kayu Lapis Indonesia Group, which recently gained three new oil palm operations in Sorong, West Papua province. The social and environmental impacts of its 33,000 hectare plantation, and suspicions that forest clearance occurred illegally before its licence was issued were revealed at the UN Bali climate conference in a film made by local NGOs. Kayu Lapis controls vast areas of logging concessions in Papua, many of which have been accused of illegalities.

Korean company, the Korindo Group, is seeking to expand its operations by over 80,000 hectares near the border with Papua New Guinea. It already controls over a million hectares of logging concessions in Papua alone.

Korindo’s palm oil operations were the subject of a July 2007 International Crisis Group report on causes of local political tensions in Papua, and in 2004 Indonesia’s Commission for Disappearances and Victims of Violence reported the firm makes regular payments to the military, including Special Forces. Alleged violent clashes between the military, company employees and locals, including a number of deaths were reported by human rights organisations in August last year.

Last week EIA received information from local NGOs on political, security and environmental tensions linked to PT Rajawali’s new 26,000 hectare oil palm plantation in Keerom, near the border with Papua New Guinea. The company is controlled by Peter Sondakh, one of Indonesia’s richest men. Special Forces troops are facilitating the deal, and local leaders have warned of major indigenous displacement if military involvement is not curbed.

More than thirty other companies are reportedly hunting Papua’s forest land. With senior ministers sanctioning plantations run by people like Abdul Rasyid, the question of who is actually in control of these developments is anyone’s guess.

this is the market into which carbon and conservation financiers must step if they are to present a credible climate friendly alternative to Indonesia’s woefully destructive forestry and plantations elites and the security apparatus. Recently, Papua’s Governor commissioned two companies to survey carbon stocks in the province, which has also been visited by representatives of Prince Charles’ Prince’s Rainforest Project. If these surveys are not concluded fast, there may not be much forest left to survey.

Reprinted from Environment Magazine, written by the Environmental Protection Agency