[Jakarta, October 7, 2020] The ratification of the Job Creation Law by the House of Representatives (DPR) on October 5, 2020, undermines Indonesia's climate commitments and forest protection efforts that have been pursued for the past nine years. The implementation of the Job Creation Law has the potential to perpetuate deforestation in Indonesia. In Madani's analysis of the risks of the Job Creation Bill on Natural Forests and the Achievement of Indonesia's Climate Commitments, if the articles that weaken forest and environmental protection regulations in the Job Creation Law are implemented, the risk of natural forest loss will increase. Five provinces in Indonesia are threatened with the loss of all their natural forests due to the rate of deforestation: Riau Province, which will lose all its natural forests by 2032; Jambi and South Sumatra Provinces, which will lose all their natural forests by 2038; Bangka Belitung Province, which will lose all its natural forests by 2054; and Central Java Province, which will lose all its natural forests by 2056.
Madani's spatial analysis shows that there are 3.4 million hectares of natural forest cover within palm oil permits (HGU, IUP, and other non-definitive permits including location permits), which could have been saved based on the evaluation of plantation permits mandated by Presidential Instruction 8/2018 (palm oil moratorium). Papua is the province with the highest area of natural forest within palm oil plantation permits, at 1.3 million hectares, followed by East Kalimantan with 528,000 hectares of natural forest within palm oil permits. With the huge additional demand for CPO due to the biodiesel policy and the increasingly simplified permitting for palm oil expansion into forest areas, Indonesia's opportunity to save natural forests during the palm oil moratorium period will be lost. If 3.4 million hectares of natural forest are lost, Indonesia will fail to achieve its climate commitments because it will exceed the deforestation quota of 3.25 million hectares by 2030. This was conveyed by Teguh Surya, Executive Director of the Madani Berkelanjutan Foundation in response to the ratification of the Job Creation Law on October 5, 2020.
And what is even more concerning, Madani's analysis shows that 75.6% or the equivalent of 143 million hectares of Indonesia's total land area of 189 million hectares is a cross-section of forest and land permits and protection areas in Indonesia. Teguh Surya said, " Of the 143 million hectares of cross-section of forest and land permits and protection areas in Indonesia, 11.3 million hectares are IUPHHK HTI, 18.9 million hectares are IUPHHK HA, 622 thousand hectares are IUPHHK RE, 11 million hectares are PIAPS, 22.7 million hectares are palm oil permits, 66.3 million hectares are PIPPIB areas, 14.9 million hectares are mineral and coal permits on land and 31.9 million hectares are oil and gas concession areas on land ."
" The tangled mess of permits and forest and land protection in Indonesia demonstrates that the Job Creation Law is clearly not the answer Indonesia's investment and economic growth are hoping for in the future ," added Teguh Surya. " The government and the House of Representatives should prioritize improving environmental and natural resource governance and strengthening the Corruption Eradication Commission (KPK) in an effort to boost the national economy. This is clear from the results of the KPK's 2018 study on the harmonization of laws in the field of natural resources and the environment, which mandates harmonization of 26 laws related to natural resources and the environment to comply with the principles of natural resource and environmental management ," Teguh explained.
Ten key obstacles to investment in Indonesia are ignored and not addressed in the Job Creation Law: corruption, bureaucratic inefficiency, access to financing, inadequate infrastructure, policy instability, government instability, tax rates, poor work ethic, tax regulations, and inflation. Instead of promising stronger economic growth, the Job Creation Law has become a nightmare.
Efforts to protect natural forests through a strengthened policy to halt the issuance of new permits (reinforcing Presidential Instruction No. 5 of 2019) are threatened with the implementation of the Job Creation Law. Four provinces, outside the PIPPIB, are at risk of losing the largest areas of natural forest: Central Kalimantan (3.5 million hectares), West Kalimantan (1 million hectares), Aceh (342,000 hectares), and West Sumatra (254,000 hectares).
" Madani's latest analysis shows that the 2020 PIPPIB Period 01, which covers an area of 66.3 million hectares, is tangled with various forest and land permits and protections. The largest forest and land protection efforts through PIPPIB are tangled with onshore mineral and coal permits, which reach 7.2 million hectares, then with onshore oil and gas permits, which reach 6.4 million hectares. Forest and land protection efforts through PIPPIB are also tangled with the PIAPS area of 4.7 million hectares as well as with palm oil permits of 1.2 million hectares, IUPHHK HA of 386 thousand hectares, IUPHHK HTI of 123 thousand hectares and IUPHHK RE of 4,748 hectares ," explained Fadli Naufal, GIS Specialist at the Madani Berkelanjutan Foundation.
Not only that, in efforts to achieve Indonesia's climate commitments in the forestry sector, especially from reducing deforestation, Indonesia is threatened with total failure because the deforestation threshold in the 2020-2030 period of 3.25 million hectares will be exceeded in 2025 if the rate of deforestation continues to increase due to weakened forest protection. " In the first Nationally Determined Contribution (NDC) document, it is stated that Indonesia has a target to reduce the deforestation rate to below 3,250,000 hectares by 2030 or a maximum of 325,000 hectares/year during 2020 to 2030 with its own efforts or with international assistance. However, this target is threatened to not be achieved if the articles that have the potential to trigger deforestation in the Job Creation Law are implemented ," said M. Arief Virgy, Insight Analyst at the Madani Berkelanjutan Foundation.
" On average, Indonesia's deforestation rate from 2006 to 2018 was 688,844.52 hectares per year. So, we can calculate that by 2025, Indonesia will exceed its deforestation quota to reach its 2030 NDC target ," added M. Arief Virgy.
Given the facts above, it is clear that the Job Creation Law is not the answer to the economic growth expected from efforts to save forests and land and achieve Indonesia's climate commitments. Instead, it actually harms the efforts made by the government to save forests and Indonesia's climate commitments.
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Media Contact:
– M. Teguh Surya, Executive Director of the Madani Berkelanjutan Foundation, HP. 0812 9480 1453, email: teguh@arsip.madaniberkelanjutan.id
– M. Arief Virgy , Insight Analyst, Madani Berkelanjutan Foundation, HP. 0877 0899 4241, email: virgy@arsip.madaniberkelanjutan.id
– Luluk Uliyah , Senior Media Communications Officer, Madani Berkelanjutan Foundation, HP. 0815 1986 8887, email: luluk@arsip.madaniberkelanjutan.id
