The Leuser Ecosystem is a rainforest area which spans over 2.6 million hectares, covering large parts of the provinces of Aceh and North Sumatra. It is home to several endangered species including orangutans, Sumatran tigers and elephants. In the last few years, NGOs such as the Rainforest Action Network have been intensively campaigning for government and industry, especially the palm oil sector, to step up protection of the area. Even Hollywood star, Leonardo DiCaprio has weighed in on the issue.
At GAR, we have been working closely for the last two years with our suppliers operating around the Leuser Ecosystem and have successfully made them aware of the necessity of protecting the ecosystem and encouraged them to adopt stronger sustainability practices.
As we settle into 2017, here’s where I believe conservation efforts stand and the areas which require more work if Leuser is to be effectively protected.
Private and public sectors demonstrate they can work together
The good news is that both government and industry are now more aligned on forest conservation. Forest conservation policies, which GAR pioneered in 2011, have now been adopted by other leading companies in the palm oil sector. This has encouraged smaller companies, such as Bumitama and First Resources to follow suit.
In 2016, the Ministry of Environment and Forestry and the Governor of Aceh agreed to enforce a moratorium on new palm oil licenses in the Leuser Ecosystem. The Governor also issued a circular to all palm oil companies prohibiting the clearance of any forest areas inside existing concessions. The Ministry would in turn monitor any illegal clearing activities.
We have seen that public-private collaboration in Indonesia on such issues is possible. During the fire and haze season of 2015, the government and palm oil buyers established a precedent of cooperation. When the Ministry of Environment and Forestry suspended the licenses of plantation companies involved in forest and peat fires, buyers suspended commercial transactions.
Efforts are underway to build on this. The IDH Sustainable Trade Initiative, an international organization that supports commodities sustainability, has engaged with national and local government and is bringing the private sector and NGOs together to work on Leuser.
The main challenges ahead
One of the thorniest issues in implementing forest conservation is encroachment. Setting aside areas for forest conservation on paper is easy but in reality, even if companies or governments indicate that an area is to be protected, external parties often see the land as abandoned and believe they have a right to use it.
In an IDH-commissioned study, research and consulting firm, Daemeter notes that almost half of the deforestation in Aceh is due to illegal encroachment and clearing. About 200, 000 hectares of palm oil plantations in the province is unlicensed. This is an area where local NGOs have a role to play in developing realistic solutions with the communities.
Daemeter also estimates that forestry concessions overlapping the Leuser Ecosystem are significantly larger than palm oil concessions – there are over half a million hectares of forestry concessions compared to 180,000 hectares allocated to palm oil. Narrow focus on one industry will not bring about a holistic workable solution and NGOs have to widen and deepen their efforts to engage all sectors operating near or in the Leuser Ecosystem. Cross-sectoral collaboration is critical and needs to be fostered.
Finally, almost two-thirds of Indonesian palm oil is consumed domestically or in Asia, where, unlike in Europe and USA, demand for sustainable palm oil is still low. A grower with poor sustainability practices can sell to these markets with relative ease. NGOs again have a role to educate consumers and actively promote demand for sustainable palm oil in these countries.
What are the prospects for the Leuser Ecosystem in 2017?
In 2016 we saw better alignment between government commitments and industry policies on forest conservation. To achieve better forest conservation in 2017 in Leuser, broader collective action is needed. The government should extend these new regulations on forest conservation to include forestry companies and actively enforce them. NGOs should help develop holistic solutions and need to work with local communities on encroachment; look to engage other sectors intensively; and help close market loopholes for unsustainable producers.
As for GAR, we continue to support our suppliers in and around the Leuser Ecosystem as they strengthen their internal processes and sustainability practices. We are using the lessons learned from our engagement with them to design better support programmes for all suppliers across our operations. We’ll also continue to focus on ongoing collaboration with our industry peers and we will also gladly share our lessons learned with other industrial sectors. Such collaboration is essential if we want to tackle this important issue effectively.