Indonesia's palm oil contracts exempt from forest moratorium

08:18, May 31, 2010      

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Indonesian President Susilo Bambang Yudhoyono said that existing palm oil contracts will be exempt from a two-year moratorium on new concessions to clear the nation' s natural forests and peat lands, the Jakarta Post reported here on Saturday.

In a historic agreement with Norway, Indonesia pledged to support a two-year moratorium on new concessions that permit conversion of virgin forests and peat lands into plantations.

In exchange, Indonesia will receive a 1-billion-U.S.-dollar grant from Norway to reduce deforestation in the country.

Indonesia is also required to establish a special team to oversee the disbursement of the fund.

The moratorium has raised questions about the expansion of palm oil businesses in Indonesia, which, together with Malaysia, account for almost 90 percent of the world's palm oil production.

Yudhoyono said palm oil plantation companies could continue their businesses in Indonesia.

"We have a policy to use degraded land ... for the continuation of the palm oil industry in Indonesia," he said in a joint press conference with Norway's Prime Minister Jens Stoltenberg at Holmenkollen Park Hotel Rica during the Oslo Climate and Forest Conference on Friday.

Yudhoyono said he would ensure that the palm oil industry could continue business-as-usual while the nation's forests would be protected.



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