Indonesia Sustainable Development News Digest

Starling Resource produces a bi-weekly Indonesia Sustainable Development News Digest email for circulation to a broader cohort of practitioners, funders, and experts. The purpose of the digest is to present readers with a brief, easily digestible summary of significant, recent news items, reports, and papers relevant to conservation, sustainable development, and the environment in Indonesia, compiled from domestic Indonesian and international media sources. The digest is produced once every two weeks throughout the year. If you are interested in receiving the digest, please let us know by email at newsdigest@starlingresources.com.

News Digest
2017 – 7: 27 March 2017

Marine & Fisheries

Indonesia destroys 81 foreign vessels for illegal shipping
— Associated Press in The News&Observer 2 April 2017
Indonesian authorities destroyed 1981 foreign vessels which had been seized for illegal fishing in the country’s waters.  Most of the vessels were from Vietnam, the Philippines, Malaysia, and Thailand. Minister of Marine Affairs and Fisheries Susi Pudjiastuti said that Indonesia was upholding its sovereignty and combatting illegal fishing. “We hope Sino [the name of one of the vessels] is the symbol of our victory against poaching after years of defeat,” Pudjiastuti said.  In total, 317 foreign shipping craft have been sunk since the country launched the in 2014. 
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Indonesian Minister to address Europe’s largest tuna industry talks
— fis.com 5 April 2017
Indonesian Minister of Maritime Affairs and Fisheries Susi Pudjiastuti will join Europe’s largest tuna industry talks in Brussels on 24 April.  Minister Pudjiastuti is expected to address the conference on social and working conditions within small- and medium-scale fisheries.  The Minister has previously stressed that “slavery, forced labour, and human trafficking still exist” in fisheries.
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FIPS are good for our fisheries — Indonesian official
— fis.com 22 March 2017
The Indonesian seafood industry will continue to benefit from ongoing fishery improvement projects (FIPs) in the cold chain sector, an Indonesian ministry official attending a Sustainable Fisheries Partnerships (SFP) industry meeting in Boston said.  Nilanto Perbowo, Director-General of Product Competitiveness of the Ministry of Marine Affairs and Fisheries, stated that SFP’s work to induce industry stakeholders to start and operate FIPS will have significant impacts in cold chain markets in the years to come, particularly for leading seafood products such as crab, snapper and grouper.
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Forestry & Land Use

Fatal floods in North Sumatra blamed on deforestation
— Apriadi Gunawan et al  Jakarta Post 29 March 2017
Rampant illegal logging and conversion of protected forests are blamed for flash floods near upstream areas of the Batang Ayumi River that left five people dead in Padang Sidempuan Regency in North Sumatra.  Dana Prima Tarigan, Director of the Indonesian Forum for the Environment (Walhi) in North Sumatra said protected forests were in a critical condition because of illegal logging and land conversion.  Flash flooding triggered by deforestation can be particularly dangerous because it can be accompanied by mud and logs capable of devastating a village, Dana said.  
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Foreigners have long mined Indonesia, but now there’s an outcry
— Jon Emont, The New York Times 31 March 2017
A long-running dispute between the Indonesian government and Freeport-McMoRan, owner and operator of the Grasberg mine in Papua Province has put the brakes on production and slammed Freeport into the center of Indonesian politics.  Freeport is resisting a law requiring the company to give up its existing contract and adopt a new Contract of Work which would mandate that Freeport must turn over 51% of the company to Indonesian owners.  
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Fatal python attack in West Sulawesi attributed to uncontrolled deforestation
— Apriadi Gunawan et al  Jakarta Post 30 March 2017
The body of Akbar, a 25-year-old palm oil farmer in Central Mamuju Regency, West Sulawesi, was found inside the stomach of a 7-meter long python near his land.  Rahmansyah, an agricultural lecturer at Hasanuddin University, said that the snake may have been driven from its forest habitat by the human activities, including the expansion of palm oil plantations.    
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European Parliament votes to ban the use of palm oil in biofuels
— Il Bioeconomista , 10 April 2017
Report and Text of the Motion for an EP Resolution  
The European Parliament adopted a resolution calling for a single certification scheme for palm oil entering the EU market and phasing out of vegetable oils that drive deforestation by 2020 to counter the impact of unsustainable palm oil production, such as deforestation and the degradation of forest habitats.  The resolution which was approved by 640 votes to 18, with 28 abstentions.  
MEPs noted that 46% of the palm oil imported by the EU is used to produce biofuel, requiring the use of about one million ha of tropical soils, but said that the existing standards of various voluntary certification schemes for palm oil are open to criticism. The resolution called for a single certification scheme to guarantee that only sustainably produced palm oil enters the EU market, as well as sustainability criteria for palm oil and products containing palm oil entering the EU.
goo.gl/AX6vsk |  goo.gl/bj3T59

Indonesia calls EU palm oil ruling “discriminatory”
— News Desk The Jakarta Post 10 April 2017
Indonesia’s Foreign Ministry denounced the European Parliament Resolution on Palm Oil and Deforestation of Rainforests (see preceding item) as discriminatory and said it was “based on inaccurate and unaccountable data on development related to palm oil and forestry management in palm oil producing countries, including Indonesia.”  The Ministry argued that oil palm plantations do not significantly impact global deforestation.  Indonesia is the world’s largest palm oil producer, supplying more than 26 million tons of palm oil-based products annually.  In recent years, the EU has accounted for up to 15% of Indonesia’s palm oil exports.
goo.gl/RwM3j2

Study: Domestic Palm Oil Standard Certification fails to curb deforestation and conflicts
— Moses Ompusunggu The Jakarta Post 4 April 2017-04-11
The introduction of Indonesia’s own sustainability standard for palm oil, known as the Indonesian Sustainable Palm Oil (ISPO), has done little to curb deforestation and land conflicts, according to a report by Forest Watch Indonesia (FWI).  The report,  Six Years of ISPO:  Unable to Fix Governance of Forests and Land, concluded that during the formative years for the ISPO system from 2009 to 2013, deforestation—the main driver of forest fires—occurred on about half a million ha of land used for oil palm plantations, equal to about 22% of total deforestation in concession areas in the country. The Agrarian Reform Consortium (KPA) recorded conflicts on 601,680 ha of land in 2016, a near doubling of the number of conflicts in the preceding year. Were the ISPO certification provisions properly implemented, this deforestation and many of these conflicts should not have occurred, the report said, noting that six years into its implementation, only 225 out of 2,302 palm oil producers in Indonesia had attained ISPO certification, although in theory all palm oil are required to comply.
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Trump puts Indonesia on US trade hit list
— Anton Hermansyah et al, Jakarta Post April 3 2017 | Meghan Sapp, Biofuels Digest, 27 March 2017
Shortly after seeing a petition from the US-based National Biodiesel Board calling for anti-dumping and countervailing duties on imports of Indonesian biodiesel, US President Donald Trump issued an executive order called for an investigation into the “trade imbalance” between the US and 16 countries, including imports of biodiesel from Indonesia and Argentina. Nearly 94% of Indonesia’s 2016 biodiesel exports went to the US.  The EU has imposed anti-dumping duties on the Indonesian product since 2013. Indonesia assesses a levy of US$50 per ton on exports of crude palm oil and $30/ton on processed palm oil products, 85% of which is used to fund subsidies to its domestic biodiesel industry, which also exports its product. The target for the biodiesel fuel subsidy fund for 2017 is IDR 10.8 trillion (US$830 million), according to Bayu Krisnamurthi, Chief Executive of the Indonesia Estate Crop Fund.  Indonesia has filed a complaint to the WTO about the US plan to impose anti-dumping and countervailing duties.
goo.gl/GylZ8V | goo.gl/rm3zuk | goo.gl/ZatccD

Explanatory note on Indonesia’s palm oil levies (used to fund biodiesel subsidies)
— Indonesia Investments 2 February 2016
Indonesia’s export tax on crude palm oil (CPO) ranges from 0-22.5% depending on the international palm oil price.  When the government benchmark CPO price drops below US$750 per ton, the export tax is cut to 0%, so Indonesia has had a zero percent CPO export tax since October 2014. In search of another way to generate revenues from the palm oil industry, the government introduced a palm oil export levy in mid-2015, consisting of a US$50 per ton levy on CPO exports and a US$30 levy on processed palm oil products. The proceeds of the palm oil export levy are used to fund Indonesia’s biodiesel subsidy program.  In 2014, the government boosted the mandated amount of palm oil blending in diesel from 7.5% to 10%, and ordered power plants to mix 20%.  
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Indonesia palm oil producers revise palm oil production, stock data upwards
— Stefani Ribka The Jakarta Post 28 March 2017
Indonesia’s 2016 palm production figure was revised upwards to 35.57 million tons of crude palm oil (CPO) and 3.05 million tons of crude palm kernel oil (CPKO), the Indonesian Palm Oil Producers Association (GAPKI) announced.  Stocks as of January had declined to 2.85 million tonnes on an increase in January exports to 2.84 million tons, up from 2.78 million tons the previous month.  Exports to India and Africa increased b30% and 88% respectively on a month-to-month basis, while exports to China fell 48%.  GAPKI predicted that the CPO price would remain in the range of US$720 to US$750 per ton over coming weeks.
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Malaysian buyers likely to boost purchases of Indonesia palm oil on expectations that Indonesia will cut its palm oil export taxes
— The Star 25 March 2017 
Malaysian buyers are ramping up imports of Indonesian palm oil as local suppliers struggle to recover from the impacts of last year’s damaging El Nino weather, boosting total bilateral palm oil imports in March to 60-70,000 tons.  Traders says Indonesia palm oil exports to Malaysia could remain high if Indonesia cuts its export tax on palm oil [in April].  Indonesia and Malaysia currently account for 90% of global palm oil production.
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Environmental damage, social conflicts overshadow Indonesia’s palm oil future
— Ratri M. Siniwi and Muham, Asia Pacific Report 27 March 2017
Palm oil is an important commodity for Indonesia, accounting for US$17.8 billion, or 12% of total export revenues.  Yet environmental issues and conflicts overshadow the sector’s future.  In April, the European Parliament is expected to vote to phase out the use of palm oil as a biodiesel fuel component by 2020 and require exporters to prove their product is sourced from plantations that adhere to sustainable practices. According to Petrus Gunarso, an Indonesian scholar, most palm oil plantations had been converted from former rubber plantations, and palm oil plantations are also establishes on degraded forest.  “By Indonesian law, that’s not deforestation,” Gunarso said. A report commissioned by the Indonesian Business Council for Sustainable Development (IBCSD), “The Cost of Conflict in Oil Palm in Indonesia”, concluded that the tangible direct costs of social conflicts ranged from US$70,000 to US$2.5 million, but intangible costs (including reputational losses, casualties and property damage) may have reached US$9 million.
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Energy, Climate Change & Pollution

Indonesia adopts cleaner fuel standard
— Moses Ompusunggu, Jakarta Post 29 March 2017
Indonesia’s Ministry of Environment and Forestry has issued a new regulation adopting stricter standards for pollution and carbon emissions from motor vehicles. Under the new rules, Indonesia will adopt the Euro IV standard, which sets a maximum sulfur content for fuels of 50 ppm.  Many Asian countries have already adopted the Euro IV standard, while the EU and some other countries have been on Euro 6 since 2014. The diesel fuel currently used in Indonesia has an allowed sulfur content of 2,000-3,000 ppm, while fuel sold in Japan, Singapore and South Korea has a maximum sulfur content of 10 ppm, and fuel in China and Thailand has a sulfur level of 50 ppm.
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Indonesia plans increase in use of new renewable energy for electric power
— Destrianita et al Tempo 11 April 2017-04-11
A new Electricity Procurement Business Plan (RUPTL) 2017-2026 for PT PLN, Indonesia’s state-owned electric power company, that was approved by the Ministry of Energy and Mineral Resources in March will increase the uptake of new renewable energy from 19.6% to 22.6% by 2025.  Coal energy consumption is expected to reach 50% of total primary energy supply by 20205, with natural gas consumption at 26% and crude oil less than 0.5%.  Minister of Electricity and Mineral Resources Ignasius Jonan said that PLN should prioritize development of mine-mouth coal-fired power plants and well-mouth gas fired plants, ensuring that development corresponds with local energy availability.
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Tidal energy projects mooted for Lombok and Bali
— Gregory Poindexter, HydroReview 30 March 2017
Two UK companies, Atlantis Resources Ltd. and DCNS Energies, announced agreements to develop marine energy in Indonesia.  Atlantis announced an agreement with SBS International Ltd. to supply turbines, engineering services and equipment for a 150-MW tidal-stream array to be located on Lombok.  Energy generated will be sold to PLN, the state-owned electric power utility, under a 25-year power purchase agreement. Ultimately, the project will include three sites around the islands of Lombok and Bali, which SBS estimates will have a total combined generating capacitiy of 450 MW. Meanwhile, DCNS signed a letter of intent with PT AIR to deliver a roadmap for the engineering industrial development, and commercial ramp-up of tidal energy industry in Indonesia.  PT Air manufactures tidal turbine products for use in Indonesia and throughout Southeast Asia.  
goo.gl/wSR6T1

Green finance for dirty ships
— Economist 11 March 2017
Though shipping accounts for just 3% of greenhouse gas (GHG) emissions, because they burn heavy oil, just 15 of the biggest ships emit more noxious oxides of nitrogen and sulfur than all the word’s automobiles put together. To address this, the International Marine Organization (IMO) agreed to cap emissions of sulphur from 2020, and the EU has voted to include shipping in the EU emissions trading scheme from 2021.  The average retrofit has a payback time of three years, but 80% of ship charters are for two years or less, making it difficult for shipping companies to replace or retrofit smoke-spewing vessels. This has led to interest in new lending structures that would make it possible to share fuel savings after retrofitting between ship-owners and charterers over longer periods to create better incentives.  The same approach might be extended to aircraft and trains.
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Conservation & Protected Areas

Fears for Indonesia park’s rare species as Trump town rises
— Stephen Wright Associated Press 29 February 2017
Encompassing two volcanos, Gunung Gede Pangrango National Park is one of the last virgin forest reserves on Java, an important site for biological research and home to a number of endangered mammals and birds, including the Javan leopard, the Javan slow loris, silvery gibbon, the Javan hawk-eagle, and the Javan trogon.  Now there are fears that “Lido City”, a planned major new 3,000 hectare development including a Trump-branded six-star hotel, golf course, theme park, man-made lake, country club, condominiums and villas adjacent to the National Park could drive wildlife to flee and bring an uncontrollable influx of people and rubbish.  The project, which is the brainchild of Hary Tanoe, US President Donald Trump’s Indonesian partner, is expected to cost more than US$300 million.
goo.gl/26czQN

Other 

Constitutional Court strips Ministry of Home Affairs’ authority to revoke local laws and regulations
— Jakarta Globe 5 April 2017 | Tempo April 2017
Indonesia’s Constitutional Court has decided that the Ministry of Home Affairs can no longer unilaterally revoke local regulations issued by provincial, municipal or district governments, ruling that cancellation of local regulations can only be done through a judicial review by the Supreme Court. In 2016, Minister of Home Affairs Tjahjo Kumolo revoked 3,143 troubled regional laws.  Some of these troubled laws were in effect “ordered” by various constituents as compensation for support for legislature members or regional leaders during election campaigns, a Tempo commentary noted, questioning whether the Supreme Court has the authority to revoke troubled regional laws.  
goo.gl/bfwsZj | goo.gl/t3ywTz


Former First Lady Calls for a Tolerant, Feminist Islam
— John Emont, 7 April 2017 
Sinta Nuriyah, the widow of former Indonesian president Abdurrahman Wahid, has continued the family’s campaign for a more tolerant, inclusive and feminist Islam.  “we live among different religions, ethnicities and cultures,” Mrs. Sinta said, “It’s necessary that we stand up to extremists.”  Tears in Indonesia’s pluralist fabric have appeared in recent years as once marginal hard-line Islamicist groups exert every greater influence, campaigning to unseat Basuku Tjahaja “Ahok” Purnama, Jakarta’s first Christian governor in generations.  Mrs. Sinta has worked to establish a network of progressive Islamic boarding schools for girls to promote gender equality in some of the most conservative, rural parts of Indonesia, but she worries that the country’s institutions may not be able to turn back the tide of fundamentalist Islam.
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Jokowi:  Indonesia to be world’s 4th largest economy by 2045
— Fedina S. Sundaryani The Jakarta Post 27 March 2017
President Joko “Jokowi” Widodo said that Indonesia would become the world’s 4th largest economy by 2045, based on projections from the Office of the Coordinating Minister for Economics and the National Development Planning Board (Bappenas).  The projections say that by 2045, Indonesia would have a population of 309 million people, with a combined gross domestic product (GDP) of US$9.1 trillion) and per capita national income of $29,000.
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Indonesian artist inserts symbols related to blasphemy charges against Jakarta governor 
— Nur Aini Republika 10 April 2017
Ardian Syaf, a freelance artist working for Marvel, inserted symbols into the artwork of Marvel’s newest comic, X-Men Gold #1 relating to the campaign against Jakarta Governor Basuki “Ahok” Tjahaja Purnama, who is up for re-election this month.  In one panel, a figure wears a t-shirt with legend “QS 5:51”, a reference to a verse in the Koran connected to blasphemy charges against Governor Basuki.  “212” is a reference to a rally against Governor Basuku on 21 February this year.   Marvel said that Ardian Syaf’s artwork would be deleted from future printings and the digital version of the comic.
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