Katingan Peat Restoration and Conservation Project, Central Kalimantan Early experiences from the pilot province of Central Kalimantan October 19-20, 2011 Dharsono Hartono

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Context Drivers of Deforestation Project MRV Approach Challenges

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Sustainable business in Indonesia? • Indonesia is both villain and victim of climate change and exploitative and expansive natural resource based economy. • Unsettled past problems, e.g., land conflict, social & ecological footprints of cheap & bad business practices, etc. • Governance gap, e.g., high cost investment, lack of legal certainty, rent-seeking economy • Knowledge gap, e.g., lack of credible baseline data • Is sustainable business the answer to climate change? Is sustainable business possible in Indonesia? • High governance requirement & legal certainty • Putting first long-term value instead of short-sighted business opportunism • Appropriate incentive for doing good & sustainable business • Increase productivity instead of expansive type of business • Protecting the remaining intact resources & restoring the degraded one. PT. Rimba Makmur Utama

Climate change = Transforming problem to sustainable business opportunity • Despite its uncertainty & lack of global governance REDD+, a newly voluntary mitigation scheme for developing countries, could become pressures to both Indonesian government & Indonesian business community to push governance reform towards sustainable natural resources based business • Indonesia’s comparative advantage in climate change based business & investment • Rich in high carbon content (HCC) ecosystems, e.g., peat land • High forest cover with high conservation value (HCV) but, at the same time, possesses high rate of deforestation and forest degradation • Rich in indigenous resource management wisdom & practices.

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Katingan Peat Forest Restoration and Conservation Project Location:

Peat forest in Kabupaten Kotawaringin Timur and Katingan, Central Kalimantan Hectares

Production forest (HP) Production forest that can be converted (HPK) Total

Type of concession:

%

198,396

87.30%

28,864

12.70%

227,260

100.00

Restorasi Ekosistem 60 years

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Technical Analysis: Forest Cover Hectares Intact Forest (pristine peat swamp forest)

Intact Low Density Forest (low density pristine peat swamp forest)

Disturbed Forest (logged over peat swamp forest)

108,189

%

47.61% © PT RMU

21,431

9.43%

68,680

30.22% © PT RMU

Non-Forest (degraded peat swamp or agriculture land)

Intact peat forest

28,960

12.74%

Peat forest

Short pole forest

Normal water level

Peat Deposit

Total

227,260

100.00%

River

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Clay or sand

© PT RMU

Context Drivers of Deforestation Project MRV Approach Challenges

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Threat: Forest Conversion

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Threats: Mining

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Threats: Illegal Logging

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Business as Usual Scenario

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Context Drivers of Deforestation Project MRV Approach Challenges

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Project MRV Steps • Establish stratification system • • • • •

•

Establish permanent sampling plots •

•

•

• •

Low pole Lowland forest Mix swamp forest Non-forest Very low pole Peat depth measurement only (D points) • Located along 4 transects • 250 meters apart • Total 200 points Watertable and peat subsidence sampling points (“D+W points”). • Located along transects • 100 D+W points • Location will be adapted in Y2 and 3 to points where peat subsidence is the fastest The full measurement plots (“D+W+B points”) a • Located both along the four transects (100 in total) and • Located according to an adaptive stratified semi-random design (another 100 plots), using a remote-sensing based forest stratification with locations selected within 500 m from waterways. .

Monitor permanent sampling plots Independent verification

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Sample location category Peat depth points (“D points”) Peat depth, watertable and peat subsidence (“D+W points”) Biomass, peat depth, watertable, and peat subsidence points (“D+W+B points”)

Number of samples measured Year 1 Year 2 Year 3 160 20 20 40 30 30

Total 200 100

100

200

50

50

Participatory Mapping with Local Communities PT RMU has been working with Yayasan Puter on community engagement and consultation since early 2009 Since third quarter 2009, Yayasan Puter has continued to community activities including FPIC independently with funding from the Packard Foundation Working with communities of village of Bapinang Hulu, SubDistrict Pulau Hanaut, District Kotawaringin Timur

Producing participatory sketch maps with community members

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Digitizing the maps and put them into GIS

Context Drivers of Deforestation Project MRV Approach Challenges

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Challenges

• • • • • •

Conflicting land tenure and weak governance Market uncertainties High transaction costs Lack of financial incentives High social and environmental costs Limited financial sources for early movers

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Land tenure Ministerial Decree SK 273/Menhut-II/2009 designates 349,860 ha as ecosystem restoration area. Within this area, PT RMU submitted ERC application for 227.260 ha

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Land tenure The Head of District of Katingan requested that PT RMU ERC application process be held up because he had issued nine mining permits and six oil palm plantation permits in the area designated as ecosystem restoration area. In addition the Head of District issued another recommendation for oil palm plantation within the boundaries of PT RMU ERC area As a result, the application process came to a halt for more than a year

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Land Swaps Bupati can propose land swaps (Perubahan Fungsi) for the area that is under moratorium Minister of Forestry Decree number 34/2010 allows land swaps (Perubahan Fungsi) within production forests group Process will take time and involves independent integrated team but no approval from parliament needed International donors can provide financial contribution to this process

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Addressing the challenges

• Credible land use and spatial plans, responsive governance • Long term investment commitment • Good corporate governance • Innovative and creative fiscal incentives • Local stakeholders enablement and environment safeguards • Hybrid approach of financial modalities

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Thank you

PT RMU 45th Floor, Menara BCA Jl. MH Thamrin no. 1 Jakarta 10310, Indonesia T. +62 21 2358 4777 F. +62 21 2358 4778 E. [email protected]

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