Indonesia’s president Susilo Bambang Yudhoyono has signed into law a two-year moratorium on new permits to clear primary forests throughout the country. The moratorium is a portion of a US$1 billion deal with Norway to stop deforestation and forest degradation in the region in hopes of cutting emissions, slowing the expansion of plantations, and fighting climate change.

The moratorium halts all new permits for logging and primary forest and peatland conversion. While industries such as timber mining, and palm oil initially argued that the moratorium would negatively impact production, environmental groups contend that the approved measures do not go far enough and allow enormous loopholes for business.

The president’s signature on the moratorium was due on January 1 but the deadline passed leaving uncertainty as to when the next stage of the deal would move forward. Concessions, such as the exemption permits already granted by the forestry ministry, were amassed in the past 5 months reportedly due to extensive lobbying by the US$30 billion global palm oil sector and other key industries.

Government figures estimate that 64 million hectares of primary forest and peatland will be shielded until December 31, 2012. However, 35 million hectares of that were already under protection. And according to Greenpeace Southeast Asia, 40 million hectares of Indonesian forest remain open for deforestation because the decree only protects primary forests instead of all natural forests as called for in the letter of intent signed with Norway in 2010.

While the moratorium has been the subject of criticism by many, it marks a change in Indonesian policy towards forest and peatland conservation. It also forces the fast growing palm industry to increase productivity and yields per hectare.

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