NF Presentation to Gov Riau Jan

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Responsible Peatland Management Positive Outcomes for Carbon, Conservation, Community and Economic Development December 2009 Dr. Neil Franklin Sustainability Director Asia Pacific Resources International Ltd (APRIL) NF Presentation to Gov Riau Jan 2009 1

Challenges Some stakeholders hold negative view on all peatland development (due to perceived carbon emissions liabilities) but this position ignores the scientific basis for benefits of responsible forest management. Internationally, intensive plantation forest management in Indonesia still suffers from poor reputation, while the sector itself is not fully recognized as a means of sustainable development and Carbon emissions avoidance. Opportunities Responsible Peatland Management can deliver: Significant Social, Environmental and Economic benefits Integrated management in support of peat Dome conservation Positive image of Indonesia in addressing climate change Win-win solution based on Sustainable Development and REDD+

Mosaic Plantation Forest: Planning Based on Micro & Macro Delineation with High Conservation Values High Conservation Value Production Forest Unproductive Production Forest Secondary Production Forest Protected by Mosaic Plantation Managed and Developed Managed and Developed Acacia Plantation Conservation Area Acacia Plantation Vigorous plantation forest and mosaic landscape protect biodiversity, provide ecosystem services, and uplift community well-being 3

Research for Sustainable Development Science-Based Solutions for Responsible Management of Peatlands.

Pioneering Research on Responsible Peatland Management APRIL s Science Based Management Support Project Independent team from Delft Hydraulics and world-leading peatland, conservation and emissions experts US$ 1 Million; 3 year program, 2006-2009. Eco-Hydrological and HCVF spatial planning to optimise plantations and minimise impact on conservation forests Develop SOPs for Responsible Peatland Management 5

Planning Guidelines for Peat Landscapes Key objective is to protect the important hydrology core water source from external impacts by a narrow hydro buffer and a wider plantation ring that have well managed water tables Peat Swamp Forest can be conserved only where its wet condition is maintained. Landscape planning must define how central core and all designated Conservation areas will be protected from plantation drainage impacts, including dealing with the ineviatable subsidence of drained plantation lands Limit drainage impacts on conservation ideally by conserving whole catchment areas, develop others: minimum fragmentation (eco-hydrology principles) Plantation landscape water management is designed to minimize subsidence & GHG emissions and maximize lifespan of productive plantations.

Science Based Peat Management Project APRIL in partnership with NGO and Academic stakeholders Monitor water & gas stock & flux in large acacia & jungle areas Derive an annual water & Carbon balance Construct a hydrology process model Predict seasonal water surplus & deficits Preemptive control adjustments to keep the system at optimal water level Understand the subsidence & Carbon release process interventions oxidation dewatering consolidation water inflow Root decay photosynthesis Litter to humus Ground water flows Peat bulk density Surface flows Peat formation Soil temp Deep ground water flows Crop growth Root respiration water table

Eco-Hydro Management Water control for reduced carbon emissions

Eco-Hydro Ring Management Carbon Protection and Peat Conservation 9

Eco-Hydrology Planning and Peatland Profile Central Dome or bog plain porous /low density peat, must conserve as water source (upstream, deep peat). Mid-slopes with adequate peat density: hydro buffer to prevent drainage impacts on the upslope central conservation core and Dome. Mid-lower slopes with adequate topographic gradient / peat porosity: acacia plantation ring under best practice water management Lowest elevation riparian and seasonal flood plain: conserve high biodiversity peat swamp forest in riparian corridor and basin peat water sinks (hydrology conservation function as well) Alluvial / mineralized peat fringe: high priority to conserve biodiversity but largely occupied by community: promote sustainable livelihoods 10

Eco-Hydrology Buffers Function: Buffer 0 cm water depth in Conservation Core from 50 cm water depth in plantation Location: on the slope edge of bog plain, not inside the zone flatter than 2.0 km between 0.5 m contours. Where 1.5 km contour spacing, 1200 m wide buffer Science data: buffers hold water gradient of 15cm / 400 m : 45 cm over 1200 m Where flatter than 1.5 km contour spacing need the 1600 m buffer Monthly monitoring of all hydro buffers for ground water levels, surface water control & response SOP (sandbags), quarterly monitoring of subsidence

Integrated Forest Management for Conservation Plantation buffer and protected boundaries Plantation buffer Teluk Meranti Village Water management zones Kerumutan Nature Reserve No plantation buffer and community encroachment

Comparison of Eco-Hydrology Plantation Forest Management against Business as Usual Degraded forests exposed to external factors Managed Eco-hydrology Plantation Forest - Illegal logging Encroachment Uncontrolled drainag Forest tree die-back Forest & Land Fire = 60 ton/ha/year CO 2 emission No forest & land fire Productive acacia plantation Managed water level Hydrologic buffers Protected Conservation Areas = 45-55% avoided emissions Berdasarkan data: APRIL, Delft/SBMSP 2009; Swedish Env. Research Institute (IVL) Oct 2009

CONSERVATION Statement on Sustainable Peatland Management by SBMS Project Team PRODUCTION Al Hooijer (Delft Hydraulics, Holland), Dr. Susan Page (Leicester University, UK), Dr. Ruth Nussbaum (ProForest, UK). The independent team supports APRIL s commitment to management of peatlands through the SBMS Project for Sustainable Peatland Management. Forests and carbon sinks in peatland can only be sustainably managed if the hydrological system is protected or rehabilitated. This is of importance for conservation, and also vital for long-term economic production on peatland. Degraded land contains low conservation value and is of marginal potential for agriculture, but holds huge carbon deposits. Such land needs to be properly managed to minimize forest loss, land fires & carbon emissions. A new approach must be developed through the establishment of buffer zones and water control infrastructure (to balance water requirements, maximise production and minimise impact on intrinsic or adjacent conservation landscapes). June 2008

Practical Solutions Kampar Peninsular: Using Plantations to Secure a conservation landscape and reduce carbon emissions.

Current Degradation in Kampar Core Hydrology is a Liability Still intact forested Core area, not impacted by hydrology degradation Based on 300 sample points 0-50 cm > 50 cm (>100 tco2/ha/yr)

Kampar Ring Plantation Integrated Landscape Management Planning Total concession area of approx. 56,000 Ha Plantations: 35,000 Ha Conservation: 15,000 Ha Community: 6,000 Ha 250,000 Ha of Deep Peat Swamp Forest protected within Plantation & Community Ring With Ring plantation and optimised water levels, current CO2 emissions can be reduced by 50% (or by 3 Million tons CO2/year). Estate Tasik Belat (North Ring) Estate Meranti (South Ring)

Plantation Ring Plan Meranti Estate (Kampar Ring South) Hydro buffer (for minimal impact on adjacent natural forests) Production (with hydro management in canals) Conservation (upstream deep peat) Livelihood zone (for community agriculture) Livelihood zone (for community agriculture) Hydro buffer (controlled and raised water levels) Indigenous trees (also functions as hydro buffer to river conservation areas)

Eco-Hydro Management Water control for minimum impact conservation boundaries and reduced carbon emissions Controlled raising of water levels in Eco-Hydro buffer zone between planted and conservation areas Water control gates to optimise at 50-60cm in plantations, and 0-20cm in conserv. areas

Investment in Forest Protection and Fire Prevention

Kampar Ring: Reduced Emissions from Deforestation and Degradation Avoided Emissions of 3 Million tons CO 2 /year with Ring REDD Voluntary Market carbon credits up to US$15-20 Million /year Protective Ring of responsibly managed plantations Reduced emissions impact right across the landscape Protection of ecosystems and biodiversity in core area Creation of several thousand additional jobs Prevention of illegal logging and opportunist settlers Collaborative management with stakeholders Poverty alleviation and participation by local communities

Social and Economic Development Ensuring that climate change commitments are integrated with development objectives

Private Sector: Bridging the Social Gap Active in social development and poverty alleviation in order to raise the standards and quality of living through the promotion of the following community empowerment programs: - Integrated Farming System (80 villages; 3,000 families) - Micro Small & Medium Business Program (development of 1,200 people) - Community Fiber Farming 30,000 Ha (9,800 people in 32 villages) - Social & Infrastructure Program (education, free health services for 20,000 people every year, building of mosques, schools, sports and cultural facilities) - Vocational Training Program (689 trained persons) and Teacher Quality Enhancement Training in several schools.

Case-Study PT RAPP: Economic Contribution Generate employment opportunities and SME development towards alleviating poverty and upgrading community well-being. Based on results of 2006 University of Indonesia Faculty of Economics LPEM study: Economic Impact Indicator Riaupulp Actitivites, 1999 dan 2005 Riau Pelalawan Indicator 1999 2005 1999 2005 Value (%) Value (%) Value (%) Value (%) Output (Rp billion)*) 6,347 (4.53) 17,400 (7.43) 2,773 (76.04) 9,315 (54.22) Gross Domestic Product - Regional (Rp billion**) Family Income (Rp billion) Employment Opportunities (people) *) Output: Market value of goods and services resulting from production activities to supply intermediate and end demands. Figures in table represent economic output/revenue resulting from the presence of Riaupulp in Riau Province **) Gross Domestic Product - Regional 2,405 (2.89) 6,593 (4.74) 1,052 (72.29) 3,533 (51.54) 622 (4.25) 1.705 (6.97) 263 (69.03) 883 (49.22) 137,780 (8.00) 249,241 (9.39) 18,571 (13.48) 36,125 (14.49) Supporting local development through infrastructures (roads, bridges, ports) reaching remote areas. One of the largest export earners in Indonesia up to US$ 1.5 billion/year, and capital intensive within APRIL Indonesia with total assets of USD 5 billion.

Scaling-Up National and global contribution of responsibly managed forest and peatland resource

The Forests Dialogue 2009: Co-Benefits of Managed Forests Consensus position of 200 of the worlds forestry stakeholders (Govt, Private, NGO, Community) Forests have a unique ability to simultaneously reduce greenhouse gas emissions, capture carbon, & reduce the vulnerability of people and ecosystems to climate change. Sustainably managed forests support livelihoods of millions of rural people and deliver products, ecosystem services and biodiversity protection.

Potential Co-Benefits of Indonesian Plantation Forestry If Indonesian develops additional 9M Ha land (15% of production forest) into HTI, Mosaic Plantation Concept will result in: 2.1M Ha protected natural forest in conservation areas 2.3M Ha land managed by villagers for social development 4.6M Ha plantations 161M m3 of sustainable fiber/yr for world market. 38 M Adt pulp production Total carbon impact: net reduced emissions of 150 Mt CO2/year

Forestry as a Climate Change Solution In the long term, a sustainable forest management strategy aimed at maintaining or increasing forest carbon stocks, while producing an annual sustained yield of timber, fiber or energy from the forest, will generate the largest sustained mitigation benefit. Source: IPCC 2007. Fourth Assessment Report.

SUMMARY A new science-based approach must be developed through the establishment of buffer zones and water control infrastructure (to balance water requirements, maximise production and minimise impact on intrinsic or adjacent conservation landscapes). [Source SBMSP Project 2009]. Sustainable Plantation Ring Management in Kampar is essential for protecting the Kampar Peninsula Core peatland, reducing carbon emissions by 50% (compared to present condition, reducing from 6 to 3 Million Tons CO2/year) and achieving balanced social, environmental and economic benefits in a Sustainable Development context Sustainable Peatland Management in Kampar Ring can become the model for Government to showcase during COP XV UNFCCC summit), with a Win- Win solution which integrates the national development and climate change mitigation objectives. Positive outcomes from landscape level planning of Indonesia s peatlands can provide maximum benefits to society including environmental protection, economic & social development and carbon (REDD+). *Based on data: APRIL, Delft/SBMSP 2009; Swedish Env. Research Institute (IVL) Oct 2009

Acknowledgements of Best Practice Quality Management System (QMS) Certification Pulp Production Paper Production Environmental Management System (EMS) Certification Riaupulp Fiber Estates ISO Certification Paper Permanence GREEN Rating PROPER 2005-2006; 2006-2007; 2008-2009 by the Ministry for Environment Program for Rating Environmental Management Performance OHSAS Certification Riaupulp Fiber Operations APRIL Mill Operations EMS Certification Integrated Paper Production Audit Certification, Occupational Health and Safety Management System Certification, Sustainable Plantation Forest Management System (LEI) Runner-Up, Environmental Excellence Award HTI & HTR Development Conservation and Community Aspects 1 st Place Best Practice, Social Programs Overall 1 st Place Best Practice Social Program (Social Category) Verification Statement, Acacia Chain of Custody Eco-label Certification for Paper Products

SUSTAINABLE FOREST MANAGEMENT Balancing Carbon, Social, Environmental and Economic Imperatives for Sustainable Development in Indonesia Thank you 31