JAKARTA: Indonesia’s latest stance on peat conservation could cause the country to miss out on some US$12 billion (RM39.10 billion) in potential export revenue per year, according to the Association of Palm Oil Companies in Indonesia (Gapki).
The new regulation could also lead to 240 trillion rupiah (RM65.17 billion) in losses from potential plantation investment, Gapki secretary general Joko Supriyono said on Friday.
“The government’s new law on peat lands, if implemented, would also affect the future of around 400,000 plasma farmers in Indonesia,” said Joko.
The government issued its newest regulation on the conservation and management of the nation’s peat ecosystem last month, according to the country’s forestry minister Zulfikli Hasan.
The clearing of peat forests for plantations has long been the subject of controversy among environmental groups, as the fragile ecosystem contains huge amounts of carbon dioxide that gets released into the atmosphere if destroyed.
Indonesia is home to around 14 million hectares of peat forest, some nine million of which have been developed. From that figure, approximately 1.7 million hectares have been converted to oil palm plantations, according to Joko Supriyono.
Palm oil production on peat lands currently contributes around US$6.8 billion annually to exports, and the government’s regulation, which has been labelled inconsistent and ambiguous by businesses and academics, could potentially disrupt the industry’s output.
“Some of the new requirements from the government don’t make any sense, it will be unrealistic in practice,” said Basuki Sumawinata, an earth sciences expert from the Bogor Institute of Agriculture (IPB).
If fully implemented, the regulation would criminalise a company or individuals whose plantation catches fire, regardless of the cause, Basuki said. The draft would also ban the construction of drainage canals on peatlands.
Basuki said the new law was ineffective in attempting to conserve the ecosystem in question as the government failed to offer technological solutions that could improve its overall condition.
Joko echoed Basuki’s sentiment, adding that the law would not only hurt palm oil corporations, but also small farmers, who manage up to 42 per cent of the palm oil plantations in Indonesia.
Source: Business Times