Good news for the Peatswamp Forests of Central Kalimantan, Indonesia

The Minister of Development Cooperation of the Netherlands, Mrs van Ardenne, has adopted for 2005 an amendment to the Dutch budget for development cooperation, which will enable financing in the order of Euro 5 million in 2005 and 10 million of structural funding each following year for the conservation and restoration of the peatswamp forests of Central Kalimantan, integrated with poverty reduction. The funding is targeted at “stopping the deforestation of the peatswamp forests on Kalimantan, Indoensia, recognising their crucial importance - locally, regionally and globally for their importance for poverty reduction, conservation of biodiversity, and prevention of CO₂ emissions.”

The 5 million for 2005 is meant as a bridging facility, while for the structural funding as of 2006 also other sources will be sought, e.g. the Clean Development mechanism and other donors. The amendment was developed as a result of intensive lobbying of the Netherlands-based conservation community, including Wetlands International. At the invitation of IUCN-NC's Working Group The Hague, Marcel Silvius presented on 13 October the case of the peatswamp forests of Central Kalimantan before an audience of members of parliament, political advisors, and representatives of the conservation organisations, and made a plea for this special allocation of Dutch development cooperation funding. The plea was followed up next day by a motion of the Christen Union and Christen Democrats proposing the amendment. With the decision of 2 November this has now been approved.

The peatswamp forests in Central Kalimantan include the Mawas, Sebangau and ex-mega rice project areas. These wetlands hold some of the largest remaining populations of the Orang Utan. They are being threatened by uncontrolled logging, drainage and fires. Wetlands International has already worked for several years in cooperation with GEC and local partners in the area, focusing efforts on cooperation with local communities. Wetlands International is coordinating its activities from its Indonesian headquarters in Bogor, and a local project office in Palangkaraya.

The WI activities are financed by CIDA and UNEP-GEF and have been successful in restoring the hydrology of several critical areas. It involved building 7 dams so far of up to 25 meters width in the up to 10 meter deep drainage channels of the failed ex-mega rice project. The construction works were implemented by the local communities to the design made by local engineers, applying various soft-soil engineering techniques. These dams represent the first serious attempt on the ground to counter the ongoing drainage of the peatland, which has lead to fires that produced 0,5 gigaton of carbon emissions in 1997 alone, just from this area.The forest also created significant health problems of local people and significant economic damages in losses of timber and reduced tourism. The location of the dams was strategically chosen to be most effective in safeguarding the Mawas peatswamp forests which have become part of a conservation concession managed by the BOS Foundation. Other foreign organizations active in the region include CARE, WWF and Alterra.

The problems in the area are a combination of poverty and environment issues which will require long-term investments to overcome. Wetlands International has therefore lobbied for a financial mechanism that will enable a sustainable funding source targeted not only at the conservation and restoration of the peatswamp forests, but particularly also at investments in alternative income sources for the local communities. This was conveyed to the Dutch parliament through a written inquiry by Mrs Huizinga of the Christian Union. In response, the Dutch Minister of Development Cooperation has specifically stated that it is intended that this will be a long-term funding scheme, and that she will pursue the establishment of a Multi-donor Trust Fund. Options to channel the funding via this financial mechanism will be investigated. She also stated that the implementation should be arranged with the local and national authorities of Indonesia, and that the funding should be carefully monitored. On a related note:

Indonesia, Germany to sign US$60m debt swap deal

November 08, 2004

The German government will sign on Monday two debt-swap agreements with the Ministry of Finance, leading to a 48 million euros (US$61.81 million) writing off of Indonesia’s obligation to the country upon their implementation.The first debt-swap agreement will be used to finance the improvement of junior high level education in the eastern part of Indonesia, by constructing 100 new schools in the region. The other debt swap will be used to fund several nature conservation projects in Indonesia. This US$400 million debt swap focuses on the conservation of what was once peatland in Kalimantan. Debt swaps are usually carried out to reduce a country’s debt by requiring the debtor to spend a specified amount of the original debt to finance certain programs that are of concern to the donors. As a consequence, the borrowing country does not have to repay the amount of the debt that is used for these programs. Debt swaps are seen as feasible options for the country to reduce its high overseas debt burden as it can no longer seek debt rescheduling via the Paris Club after Indonesia graduated from the International Monetary Fund-sponsored economic reform program. Under the Indonesian-German debt-swap scheme, Germany will write off a certain amount of debt after Indonesia spends 50 percent of the renounced amount in rupiah on projects that have been agreed by both governments. The implementation of all the projects under the debt-swap deals is monitored by German development bank KfW's branch in Jakarta.

Source: http://www.thejakartapost.com