Friday, September 17, 2010

Graft could jeopardize Indonesia's climate deals

Sunanda Creagh in Reuters: Billions of dollars Indonesia stands to earn every year in climate change deals could be at risk if it fails to stamp out corruption in its forestry sector, long notorious for graft and focus of an ongoing investigation. Norway is preparing to pay the first $30 million of $1 billion it agreed to give Indonesia in return for a commitment to preserve valuable forests, part of a UN scheme in which rich nations will pay developing countries not to chop down trees.

"Our emission reduction potential from forestry and peatland is about 1.5 gigatonnes by 2030. So if the price of emissions reductions is around $10 per ton in 2030, then our potential revenue is $15 billion per annum by 2030," Agus Purnomo, head of Indonesia's National Council on Climate Change, told Reuters.

But considerable obstacles stand in the way. Indonesia's lucrative palm oil, plantations and mining sectors say the moratorium on land conversion will hinder expansion and profits. And the forestry sector has a legacy of mismanagement and graft. "It's a source of unlimited corruption," said Chandra M. Hamzah, deputy chairman at the KPK anti-graft agency set up by President Susilo Bambang Yudhoyono to combat corruption.

An Ernst and Young audit found that in just 4 years between 1993/94 and 1997/98, Indonesia's reforestation fund lost $5.25 billion through systematic financial mismanagement and fraud. Anti-graft officials are concerned that the vast sums on offer under the UN scheme could lead to further corruption and theft….

The last batch of sawnwood from the peat forest in Indragiri Hulu, Riau Province, Indonesia. Deforestation for oil palm plantation. shot by Riau flickr user:Wakx, Wikimedia Commons via Flickr, under the Creative Commons Attribution-Share Alike 2.0 Generic license

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