REDD concerns deepen

Down to Earth No.82, September 2009

As Indonesia pushes ahead with plans for REDD, the World Bank and others are making ill-prepared agreements on funding projects in Indonesia.

In the Bank's case this is with apparent disregard for its own policies on consulting forest-dwelling communities and on safeguarding their interests

The World Bank is positioning itself to become one of the major funders of REDD (Reducing Emissions from Deforestation and Forest Degradation in Developing Countries)¹, through its Forest Carbon Partnership Facility (FCPF) and the Forest Investment Program (FIP).²

Indonesia submitted its Draft 'Readiness Planning Proposal' (R-PP)³ to the FCPF in May, prompting a storm of criticism from civil society organisations at home and internationally and calls to delay approval of the plan until major deficiencies have been sorted out. These include:

• A lack of consultation with key stakeholders, such as indigenous peoples, a lack of access to information, including almost none in the Indonesian language;
• The failure to address a deficient national legal framework for protecting indigenous peoples' rights and the failure to address these rights in the R-PP itself;
• The lack of attention to governance issues, and the potential for corruption in implementing REDD projects, especially given the lack of clarity surrounding the status of forest land claimed by the state, and overlapping land use claims from other sectors such plantations and mining;
• The concentration of 'ownership' of REDD in the forestry ministry, leading to risks that conflicting legislation, on plantations and peatlands for example, will continue to drive deforestation.⁴

NGOs in Indonesia, the UK, US and Norway have also written to their governments calling for improvements in the FCPF approval processes before Indonesia's R-PP is passed. They have highlighted concerns including a tendency to make decisions without reference to the World Bank's safeguards and international standards, despite the need for this being spelled out in the FCPF's Charter. For example, the Charter requires that activities, including the R-PP

"comply with the World Bank's Operational Policies and Procedures, taking into account the need for effective participation of Forest-Dependent Indigenous Peoples and Forest Dwellers in decisions that may affect them, respecting their rights under national law and applicable international obligations." (Principle 3.1(d), FCPF Charter).

The key World Bank safeguards for REDD are OP4.10 on Indigenous Peoples, OP4.36 on Forests and OP4.12 on Involuntary Resettlement.⁵ Relevant International obligations include the United Nations Declaration on the Rights of Indigenous Peoples, as well as other international instruments on human rights and the environment.⁶

Indonesia's R-PP was considered by the FCPF's Participants Committee⁷ in June, but a decision on whether or not to accept the proposal, was delayed until July. Accepting it means giving Indonesia access to USD3.6 million in FCPF funding towards ‘readiness’ activities.The next Participants Committee meeting is due in October and the NGOs have called for any decision on Indonesia's R-PP to be delayed until then at the very least. They argue that setting low standards for approving the initial plans under consideration (including Indonesia's) will signal to other countries that they will also be able to submit sub-standard Readiness Plans in future. Without proper protections for forest-dwellers, REDD is far less likely to achieve any positive result in terms of reducing greenhouse gas emissions from deforestation, since the denial of rights is widely recognised as an underlying cause of deforestation in itself.⁸

REDD regulations
Indonesia's forestry minister has now passed at least three pieces of legislation relating to REDD: Ministerial regulation No 68, 2008 on REDD pilot projects, the main REDD regulation, No 30, 1 May 2009 and regulation 36, 22 May 2009,⁹ on revenue sharing rules for REDD (see box, next page).¹⁰ Regulation 30 was passed despite a request from the United Nations Committee on the Elimination of Racial Discrimination (CERD) to make changes to accommodate indigenous peoples’ rights to own and control their traditional areas.¹¹

The regulations are all based on Indonesia's 1999 Forestry Law, which fails to provide for indigenous ownership of forests within the 'state forest zone', an area that amounts to some 70% of Indonesia's total land area.¹²

Instead, the REDD legislation is aimed at ensuring that central government remains firmly in control of arrangements for - and income generated by - REDD.

Australian projects gearing up for carbon trading

Australia contributes funds to the FCPF¹⁴, but has also made its own bilateral agreements with Indonesia. These include:

• The Indonesia-Australia Forest Carbon Partnership, signed on 13 June 2008, to build on and formalise existing long-term practical cooperation between Indonesia and Australia on REDD. It includes $30 million for the Kalimantan Forests and Climate Partnership and a $10 million bilateral support package for Indonesia on forests and climate (see also below). Three key areas are identifed: strategic policy dialogue on climate change; increasing Indonesia's carbon accounting capacity; and identifying and implementing incentive-based REDD demonstration activities.
• A Roadmap for Access to International Carbon Markets, agreed in November 2008. It is "a multi-phased strategy that is assisting Indonesia develop the necessary technical, system and financial pre-requisites for participation in future international carbon markets for REDD."
• The Kalimantan Forests and Climate Partnership (KFCP), described as the first, large-scale REDD demonstration activity of its kind in Indonesia. It aims to "demonstrate a credible, equitable and effective approach to REDD, including from the degradation of peatlands, that can inform a post-2012 climate change agreement…. trialling an innovative, market-oriented approach to financing and implementing measures for REDD." The initial focus is on an area of more than 100,000 hectares of degraded and forested peatland in Kapuas, Central Kalimantan. The initial aim is to protect 50,000 ha of peat swamp forest, and to rehabilitate a further 50,000 ha of degraded peatland to create a buffer around the existing forest. The overall target is to preserve up to 70,000ha of peat swamp forest and to re-flood, rehabilitate and reforest 200,000 hectares of degdraded peatland.
• A second REDD demonstration activity, which Australia and Indonesia agreed to develop in November last year. The second demonstration activity aims to test different aspects of REDD in a different location and forest type from the Kalimantan pilot.
• A bilateral package of support to Indonesia on forests and climate, to "help Indonesia develop its national Forest Resource Information System and National Carbon Accounting System for Indonesia, to support the development of a national policy framework and strategies for REDD, and to better monitor, manage and prevent large scale forest fires in Indonesia."¹⁵

As is clear in the descriptions, these agreements are very much oriented toward carbon trading. Under REDD, this means carbon credits generated by reducing emissions in forests, can be sold on international markets and purchased by companies wanting to offset their own emissions. The Australian government argues that "[w]hile financing from developed countries will play a role, ultimately carbon markets are the only mechanism capable of mobilising investment on the scale needed to support and provide incentives for REDD."¹⁶

However, the arguments against offsetting are convincing: emissions reductions need to be made in industrialised countries as well as in the developing world, if we are to have a remote chance of avoiding dangerous levels of global warming.¹⁷ Carbon trading has been rejected by many civil society organisations, including the Climate Justice Now! network, Friends of the Earth International and Indigenous Peoples' Global Summit on Climate Change, held in Anchorage in April this year.¹⁸

The Australia-Indonesia agreements also lack commitment to protect the rights and livelihoods of forest-dwellers, only offering, in the KFCP, for example, the aim to "improve livelihoods for forest-dependent communities..". The KFCP factsheet states that the project is "working closely with local communities" and is linking with existing initiatives and international agencies working in the region.

An initial 'lessons learned' document was submitted by Indonesia and Australia to the Poznan UNFCCC meeting in December 2008. This shows that the project is sticking closely to the Indonesian forestry ministry line regarding control over Indonesia's forests. The document concludes that national governments of a REDD host country must be consulted on and agree the location of demonstration activities, but that local governments and local communities only need to be consulted. It also states that "genuine and enforceable legal rights to forest carbon are fundamental to the success of a REDD demonstration activity", but then goes to say that KFCP is approaching this issue in the context of Indonesian forestry law.¹⁹ Since this law fails to protect the rights of indigenous communities, as has been repeatedly pointed out by AMAN and now highlighted by the CERD, in reality, Australia's funding for REDD means support for the continuation of an unjust forest management regime which has systematically marginalised forest communities and violated their rights to land and resources.

On top of this, cooperation with the private sector is being encouraged in this project. For example, the KFCP agreement names the world's biggest mining company BHP-Billiton, as a founding member of the agreement - though this fact is not mentioned in other KFCP documents. The agreement doesn't state how much BHP has provided towards the $100 million target, but says only that its contribution will focus on activities "aimed at avoiding further deforestation of high conservation value areas within the Indonesian part of the Heart of Borneo."²⁰ The company, which has operated in Kalimantan, has attracted criticism for continuing to mine coal - the dirtiest fossil fuel in terms of greenhouse gas emissions.²¹

Notes

1. See DTE 79, DTE 80-81 and DTE 80-81 for more background on REDD and REDD plans in Indonesia.
2. See FIP and FCPF, Fern and DTE 76-77 for background.
3. May 2009 version previously available online at http://www.forestcarbonpartnership.org/fcp/Node/180
4. These concerns are expressed in letters from HuMa to FCPF, June 15th, 2009; Sawit Watch and AMAN to Forestry Minister MS Kaban, May 15th, 2009; Rainforest Foundation Norway to FCPF, 14th July 2009, Rainforest Foundation UK to the UK government, 16th July, among others.
5. Further information available on Forest Peoples Programme website and Bank Information Center
6. Safeguarding rights in the FCPC, Presentation by Marcus Colchester, Forest Peoples Programme, Rights & Resources Initiative and Chatham House Dialogue on Forests, Governance & Climate Change, London, 8/Jul/09
7. For a list of FCPF participants click here. Indonesia is listed as a REDD country participant.
8. FPP, RFN and RFUK letters as above and Bank Information Center letter to Senator Leahy 13/Jul/09.
9. English and Indonesian version available from http://aseanforest-chm.org/document_center/knowledge_networks/arkn_fcc/redd_documents/indonesian_minister_of_forestry_regulation_on_redd_permenhut_p_30_menhut_ii_2009.html
10. The regulation can be viewed in Indonesian at http://www.dephut.go.id/index.php?q=id/node/5428.
11. See DTE 80-81
12. See DTE 79, and DTE special report Forests, People & Rights, 2002.
13. See DTE 80-81
14. Australia has provided AUD 11.7 million to the FCPF and is contributing AUD 10 million to the Forest Investment Program, see http://www.climatechange.gov.au/international/publications/fs-ifci.html accessed 22/Jul/09.
15. See http://www.climatechange.gov.au/international/publications/fs-ifci.html
16. http://www.climatechange.gov.au/international/publications/fs-ifci.html, accessed 24/Jul/09
17. See DTE 80-81, and Friends of the Earth publication, A Dangerous Distraction, June 2009.
18. See DTE 80-81, the Anchorage Declaration can be accessed from www.tebtebba.org
19. See http://www.climatechange.gov.au/international/publications/pubs/a_redd.pdf
20. See http://www.climatechange.gov.au/international/publications/pubs/kalimantan.pdf
21. Australia launched the Global Carbon Capture and Storage Institute in April this year - founding members include the Australian, Indonesian, UK government and the EU as well as mining companies BHP Billiton and Rio Tinto. Many NGOs are sceptical that carbon capture and storage (CCS) can be viable and consider it a get-out for governments wanting to avoid tackling coal-generated energy companies. See Global Institute website and DTE 80-81.
22.  ARPAG: Menyelematkan Ruang Hidup Rakyat dan Ekologi Gambut, via Sarekat Hijau website at . See also http://www.petakdanum.blogspot.com/ and http://www.sekolahgambut.blogspot. com/.