Indonesia forestry graft threatens carbon-trade- report

Indonesia forestry graft threatens carbon-trade- report

By Sunanda Creagh

JAKARTA, Dec 1 (Reuters) - Indonesian plans to set up a carbon trading
market potentially worth billions of dollars to protect rain forests may
fail because of widespread corruption in its forestry sector, Human Rights
Watch said on Tuesday.

Indonesia is seen as a key player in the fight against climate change given
it still has huge swathes of carbon absorbing tropical forests.

But partly because of deforestation, a 2007 World Bank report put Indonesia
as the world's third-largest emitter of greenhouse gases and the country is
under renewed scrutiny in the lead up to global climate talks in Copenhagen
starting next week.

Indonesia could benefit from a United Nations-sponsored scheme called REDD,
or Reduced Emissions from Deforestation and Degradation, under which poor
nations earn money from carbon credits traded in exchange for the
preservation of forests.

However, Human Rights Watch questioned in a report whether Indonesia could
be a reliable carbon trading partner.

"In the absence of safeguards, the carbon finance market will simply inject
more money into an already corrupt system, shortcutting needed reforms and
exacerbating the situation," it said.

There was a risk, for example, that because of corruption REDD project
areas could be illegally logged, thereby rendering the carbon credits
worthless, the report said.

The study, which looked at the forestry sector between 2003 and 2006,
estimated Indonesia lost nearly $2 billion annually through unpaid
royalties and taxes on timber, tax evasion by exporters and unacknowledged
subsidies.

"Funds desperately needed for essential services that could help Indonesia
meet its human rights obligations in areas such as health go instead into
the pockets of timber executives and corrupt officials," the report said.

World Bank health experts estimated the average annual loss of $2 billion
would be sufficient to provide a package of basic health care benefits to
100 million of Indonesia's poorest citizens for two years, the report said.

A spokesman for Indonesia's Forestry Department said the government was
serious about cracking down on illegal logging and said this was
illustrated by a drop in the number of cases from 9,600 in 2004 to 200 in
2009 and just 45 in 2009.

"Many civil servants in both the central and regional governments have been
disciplined or have even been subject to legal processes where there is
evidence of involvement in illegal logging," said the spokesman, Masyhud,
who uses only one name.

"The government is deeply concerned about the economic losses, the damage
to the environment and the preservation of the forest as well as the
problem of moral hazard."

The report recommended Indonesia's Corruption Eradication Commission (KPK)
should be strengthened and banks should be pressed to reveal their
customers and monitor suspicious transfers, particularly if they involved
senior forestry and administration officials.

Data on the amount of timber logged should be more carefully compiled and
made public, while other countries should pass laws requiring documentation
proving timber is legal, it said.

Sumber :

The report can be found at www.hrw.org/ en/node/86705. ((For a story on
logging firms and climate change [ID:nJAK459854] )) (Editing by Ed Davies
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