Ridwan Max Sijabat, The Jakarta Post, Jakarta | Business | Mon, October 06 2014, 10:35 AM

Palm oil and forestry-based industries strongly protested the newly issued government regulation on peatland protection and management, saying that it would hurt investment in oil palm plantations totaling Rp 136 trillion (US$11.17 billion) and 340,000 workers in the plantation sector.

Indonesian Palm Oil Producer Association (Gapki) and Pulp and Paper Producers Association said during a roundtable discussion organized by Indonesian Journalists Association (PJI) in Jakarta on Friday that the government regulation should be annulled or revised.

The association claimed that the regulation was formulated and signed by President Susilo Bambang Yudhoyono recently without any discussion with relevant stakeholders.

The regulation stipulates that the minimum water level in peatland must be maintained at 40 centimeters. Peatland where the water level is below 40 cm will be categorized as damaged and will have to undergo rehabilitation.

Water levels in the country’s 1.7 million peatlands are mostly below the required level to grow oil palm and eucalyptus trees. Therefore, most peatland areas accommodating oil palm plantations will have to be rehabilitated. According to the association, if water levels surpass 40 cm, oil palm and eucalyptus trees will be unable to grow due as their roots will be submerged in water.

Gapki secretary-general Joko Supriyono said the regulation would hamper the planned expansion of new oil palm plantations worth Rp 240 trillion, which was expected to generate 400,000 new jobs and recruit 300,000 nucleus farmers.

Indonesia produced around 26 million tons of crude palm oil (CPO) and reaped $21.2 million from CPO exports in 2013.

The regulation would affect not only oil palm plantations but also the hundreds of thousands of workers, he said, adding that the new regulation would certainly affect planned investment in new oil palm plantations, mostly located in peatland areas in Sumatra, Kalimantan and Papua.

Pulp and Paper Producers Association deputy chairman Rusli concurred and said the new regulation would hit five pulp sawmills and cause the layoff of hundreds of thousands of workers and farmers in the industrial forestry subsector.

“We fear that the new government regulation has been issued at the order of Indonesian pulp and paper producers’ competitors overseas and it is part of their global campaign to fight against Indonesian pulp and paper producers and the country’s booming palm oil production.

Basuki Sumawinata, land expert from the Bogor Institute of Agriculture (IPB), said the downgraded peatland areas should not be rehabilitated but should be managed by applying ecohydro technology for peatland.