VZCZCXRO4142
RR RUEHCHI RUEHDT RUEHHM
DE RUEHJA #2780/01 2750925
ZNR UUUUU ZZH
R 020925Z OCT 07
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC 6539
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHKO/AMEMBASSY TOKYO 0902
RUEHBJ/AMEMBASSY BEIJING 4375
RUEHBY/AMEMBASSY CANBERRA 1300
RUEHUL/AMEMBASSY SEOUL 4232
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 02 JAKARTA 002780 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EAP/MTS AND EB/IFD/ODF 
USFS FOR CMACKIE 
USTR FOR MLINSCOTT, DBROOKS 
USAID FOR CBARBER, MMELNICK 
TREASURY FOR TFCA - BERG 
DEPARTMENT FOR OES/IET and OES/ETC 
NSC FOR CEQ CONNAUGHTON, VAN DYKE 
 
E.O. 12598: N/A 
TAGS: SENV EAID KGHG ECON PGOV ID
SUBJECT: USG COULD LEVERAGE $100 MILLION AUSSIE FORESTRY INITIATIVE 
IN INDONESIA 
 
¶1. (SBU) Summary and Action Request: In the run up to COP 13, 
Australia has announced an AUS$100 Kalimantan Forests and Climate 
Partnership.  Post could increase the long-term impact of our 
current projects in forestry and wildlife conservation by leveraging 
this new initiative.  Any additional funds that Post could program, 
perhaps even before COP 13, would also enhance our position at Bali 
and show Indonesia and the world that the USG is taking significant 
measures to assist the world's third largest GHG emitter.  The 
Australians see potential opportunities for collaboration and 
express a willingness to harmonize their activities with us.  An 
Australian delegation will visit Indonesia in late October to 
solicit input and discuss potential collaboration.  Post requests 
suggested guidance and information on identifying additional funding 
available to leverage this Australian initiative. 
 
The Kalimantan Forests and Climate Partnership (KFCP) 
--------------------------------------------- -------- 
 
¶2. (U) Embassy and USAID Mission met with our Australian 
counterparts in Jakarta on September 25 to discuss their Kalimantan 
Forests and Climate Partnership (KFCP).  Under the Partnership, 
signed in Sydney on September 9 by Foreign Minister Alexander Downer 
and his Indonesian counterpart, Dr. Hassan Wirajuda, Australia will 
contribute up to AUS$30 million (US$22 million) to preserve and 
rehabilitate forest peat land in Central Kalimantan.  The 
Partnership aims to prevent the deforestation of roughly 70,000 
hectares of Kalimantan's peat land forests, to re-flood 200,000 
hectares of dried peat land, and to plant up to 100 million trees on 
rehabilitated peat land.  Government, NGO, and press reaction in 
Indonesia to the KFCP has been very positive. 
 
¶3. (SBU) According to our Australian counterparts, the Partnership 
aims to raise another AUS$70 million in funding (for AUS$100 million 
total) over the next four years from other donors -- including 
countries, NGOs and the private sector.  For example, BHP Billiton 
is a founding partner of the KFCP, and it will focus on protecting 
forested peat lands with high conservation value.  However, they 
also indicate that the AUS$100 and AUS$30 million figures are "soft" 
targets; these could be lower or higher depending on interest from 
outside parties.  USAID noted that it is also keen on leveraging the 
private sector for its environmental programs. 
 
¶4. (SBU) This AUS$30 million is in addition to the AUS$10 million 
committed in July 2007 to help reduce greenhouse gas (GHG) emissions 
by reducing fires in forests and peat lands and improving forest and 
carbon monitoring in Indonesia.  As part of this commitment, 
Australia carried out a pre-feasibility mission in August to 
identify possible areas for activities to improve fire and peat land 
management.  The KFCP initiative reflects the outcomes of the 
pre-feasibility study.  However, AUSAID has not begun spending the 
AUS$10 million; it is still in the process of preparing a Subsidiary 
Agreement (the implementing agreement) with the GOI. 
 
¶5. (U) This project is part of Australia's AUS$200 million Global 
Initiative on Forests and Climate (GIFC), launched in March 2007, to 
reduce greenhouse gas emissions from global deforestation through 
sustainable forest management.  Kalimantan contains a large 
proportion of Indonesia's peat lands, which store at least six times 
as much carbon per hectare than other forests.  The Australian 
government estimates that the project could reduce GHG emissions by 
700 million tons over 30 years. 
 
Potential for Collaboration and Harmonization 
--------------------------------------------- 
 
¶6.  (U) This large Australian initiative could significantly 
complement our current projects in forestry and wildlife 
conservation, which are relatively small and piecemeal.  USG work in 
forestry and conservation includes USAID's $8 million Orangutan 
Conservation Services Program (spread over three years), the Heart 
of Borneo Initiative, and ongoing U.S. Forest Service-Indonesian 
Ministry of Forestry cooperation.  In addition, we are funding 
activities under a $1 million Illegal Logging MOU with Indonesia (To 
place this in context, the March-May 2005 GOI operation to crack 
down on illegal logging in Papua had a budget of approximately $1.3 
 
JAKARTA 00002780  002 OF 002 
 
 
million).  We are also in the process of negotiating a $19.6 million 
debt redirection under the Tropical Forest Conservation Act; the GOI 
will decide how to direct this financing. 
 
¶7. (SBU) The Australians indicate that they see potential 
opportunities for collaboration as part of the KFCP, and express a 
willingness to cooperate and harmonize their activities with the 
USG's work.  A high-level Australian delegation led by Robin Taylor, 
Counselor of Regional Development and Infrastructure for AusAID, is 
coming on October 22 to visit Kalimantan and have discussions in 
Jakarta to begin identifying and setting up management mechanisms 
and partnerships for the KFCP.  The delegation will want to meet 
with Post around October 29 to solicit input and discuss potential 
future collaboration. 
 
 
Comment 
------- 
 
¶8. (SBU) Comment: Indonesia's forests are under severe threat and 
possess great environmental and economic value; the GOI is giving 
them political priority in the run up to COP 13.  Post would like to 
strengthen the USG environmental program in Indonesia.  This could 
complement and leverage the large commitment that Australia is 
making to address deforestation and climate change.  If there were 
additional funds that Post could program, perhaps even before COP 
13, this would garner for us an even stronger position at the table 
in Bali and show Indonesia and the world that the USG (together with 
strong allies like Australia) is taking significant measures to 
assist the world's third largest GHG emitter.  End Comment. 
 
HUME