Fix Indonesia's land use crisis to tackle the haze

While people in neighbouring countries wring their hands in despair over the haze, in fact, Indonesian companies can do the right thing to reduce the fires that foul the air every year.

Private enterprises, particularly palm oil firms, are key to any solutions to tackle the haze and promote responsible land use.

In Indonesia, oil palm plantations take up about 11 million ha of land, according to the US Department of Agriculture. There are about 4.5 million ha of pulpwood plantations.

A study published last year found that between 2000 and 2010, oil palm development accounted for 678,668 ha of natural forest destruction in Sumatra. Nearly 90 per cent of this deforestation was driven by private enterprises, followed by smallholdings (10.7 per cent) and state-owned plantations (0.9 per cent). This is according to the study by researchers from ETH Zurich, Bogor Agricultural University and the Centre for International Forestry Research in Bogor.

The government, of course, has a role to play, but the key to sustainable solutions to prevent haze is companies, which are a major cause of the fires and deforestation.

While there are plenty of examples of good company practices that show that being greener doesn't hurt profits, in Indonesia, too many companies are focused on short-term gains. They have little incentive to change destructive practices and know that compliant or ignorant government officials will not intervene. For decades, many companies have illegally grabbed lands, cleared the forests and booted out local communities, all with the government's blessing.

This foolish development paradigm has set Indonesia up for massive destruction that has become one of the world's worst environmental crimes. Some companies are already changing and adopting better practices. Their leadership is key.

Here are some solutions to Indonesia's land use crisis:


Draining swampy peatlands is a bad idea. Dried-out peat is flammable, releases huge amounts of greenhouse gases, and the land subsides over time. There are an estimated 2 million km of drainage canals in Indonesia's peatlands, many built by companies.

These need to be blocked.

A programme funded by the Canadian government and run by Wetlands International, a global NGO, involved blocking dozens of canals in Central Kalimantan in part of a 1 million ha peatswamp that was drained for a failed rice-growing plan in the 1990s. Once dammed,the reflooded areas were less prone to blazes. The canals behind the dams also filled with fish during the wet season, providing locals with an extra supply of food and income during drier months.

Villagers could also grow rattan, native rubber trees, sago palm and other crops in the reflooded landscape, pointing to alternative crops which companies could grow that are far less destructive.

President Joko Widodo, during a visit to Riau last year, took part in damming a canal with villagers.

He promised to restore peatlands and crack down on companies that continue to clear forests and peatlands.

He needs to make good on that promise.

Some companies have already built dams but experts say maintaining high water levels needs to be managed across the landscape, not within a single concession.


The national government already bans development of new peatland concession areas under a moratorium but does not cover development within existing concessions if the peat is less than 3m deep.

Some companies, such as Wilmar, Asia Pulp & Paper (APP) and Asia Pacific Resources International Ltd (APRIL), have imposed voluntary bans on deforestation and development on peat areas and these pledges are monitored by NGOs.

APP is also mapping out all its existing pulpwood concessions on peatlands, a first for an Indonesian company, and has pledged to restore some areas, as has APRIL.

More than half of Indonesia's roughly 20 million ha of forested peatlands have now been developed, deforested, drained or burnt.


Voluntary industry standards can work, particularly when consumers demand sustainably sourced products.

The Roundtable on Sustainable Palm Oil (RSPO), while not perfect, sets standards for the palm oil sector that have improved practices, particularly for managing plantations on peatlands.

As of this month, the RSPO has only 107 members in Indonesia covering 1.3 million ha, or about 12 per cent of total plantation area. Indonesia has its own standards that all palm oil firms must adhere to but these are regarded by some industry analysts as less rigorous than the RSPO's.

Major buyers, though, such as Nestle, Kelloggs, Hershey and Procter & Gamble have made deforestation-free palm oil sourcing pledges, providing much-needed leverage. More such pledges are needed.

Once an industry sets its mind to sustainable production, the effects can be remarkable. In Brazil, a moratorium on forest conversion established by Brazilian soya giants in 2006 dramatically reduced deforestation for soya crop expansion in the Amazon, a study released in the journal Science early this year found.

Before the moratorium, 30 per cent of soya expansion occurred through deforestation. After the moratorium, only about 1 per cent of the new soya expansion came at the expense of forest,? according to Holly Gibbs of the University of Wisconsin-Madison as reported by environmental news site Mongabay.


Indonesia's palm oil yields are about half Malaysia's and could be significantly raised through investment in better practices. Some of the bigger players are already doing this and helping smallholder communities who supply them.

Trials by US company Cargill, in a 2013 case study on industry best practices by Daemeter Consulting, have shown yields in Indonesia could almost be doubled, with higher yields possible even on marginal soils. This demonstrated that degraded areas could be brought under cultivation, leaving remaining forested areas untouched.

Researchers caution that higher yields would mean more profits for companies and are an incentive for yet more expansion. So higher yields need to be twinned with strong and enforceable conservation rules.

As the push for greener commodities grows, so too is the government's push for expansion - despite low world palm oil prices. The government wants production of 40 million tonnes by 2020 versus a forecast 31.5 million tonnes this year.

Indonesia's palm oil industry association GAPKI wants more expansion on peatlands, regardless of the risks. Global consumers, Indonesians and their neighbours should tell GAPKI to rethink its vision, which will cause more deforestation and fires.

The blind focus on palm oil at the expense of other food crops is also endangering Indonesia's long-term food security. Indonesians need a better deal from companies and their politically connected masters.

This article was first published on Nov 4, 2015.
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