VZCZCXRO8050
RR RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHJA #0307 0451058
ZNR UUUUU ZZH
R 141058Z FEB 08
FM AMEMBASSY JAKARTA
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHKO/AMEMBASSY TOKYO 1523
RUEHBJ/AMEMBASSY BEIJING 4725
RUEHBY/AMEMBASSY CANBERRA 2006
RUEHUL/AMEMBASSY SEOUL 4402
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHDC

UNCLAS JAKARTA 000307 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR G, OES, AND EAP 
USFS FOR CMACKIE 
USTR FOR MLINSCOTT, DBROOKS 
USAID FOR ANE, EGAT FOR CBARBER, MMELNICK 
NSC FOR CEQ CONNAUGHTON, VAN DYKE 
TREASURY FOR KBERG 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: SENV EAID KGHG ECON PREL ID
SUBJECT: PROPOSED NORTHERN TRANS-KALIMANTAN HIGHWAY UNDERMINES USG 
PROGRAMS 
 
¶1. (SBU) Summary:  Post has strong reservations about a proposed 
Northern Trans-Kalimantan Highway (NTKH), which is the focus of an 
AsDB technical assistance grant for a pre-feasibility study.  The 
economic rationale for the road is weak, and we support the USG 
decision to express several reservations about the highway and 
related study at the next AsDB board meeting in Washington, D.C. on 
February 14. This study could lead to a project to construct new, or 
rehabilitate existing, road networks.  This would exacerbate the 
problems of illegal logging and habitat loss, and undermine ongoing 
USG programs to protect forest biodiversity in Indonesia.  End 
Summary. 
 
¶2. (SBU) Background: The AsDB proposal includes a component that 
would bisect the Kayan Mentarang National Park and the Betung 
Kerihun National Park in Kalimantan, two of the largest and most 
important protected areas on Borneo.  Cutting through these intact 
forests would cause damage to biodiversity by increasing illegal 
logging and exacerbating degradation of the largest block of intact 
forest within the "Heart of Borneo" region.  Fragmentation and 
degradation of this wildlife sanctuary area would threaten a range 
of highly endangered species including the orangutan. 
 
¶3. (SBU) The initial economic rationale provided for developing the 
NTKH is improving economic opportunities for rural populations. 
Extraction of timber is the only potentially viable economic 
activity in this steep mountainous area.  Once road contractors 
extract timber, any significant long-term economic activity to 
support road maintenance is unlikely.  At this time, there is no 
clear long-term benefit for the rural populations in northern 
Kalimantan, while there is concern that the logging industry could 
be the short-term beneficiary. 
 
¶4. (SBU) Post is concerned that if construction of the NTKH 
eventually takes place, it would contradict and undermine the 
objectives of a number of ongoing U.S. Government programs to 
protect forest biodiversity in Indonesia.  These include the Heart 
of Borneo Initiative, Orangutan Conservation Services Program, the 
U.S.-Indonesia MOU to Combat Illegal Logging and Associated Trade, 
new activities to combat climate change, as well as forest 
conservation programs implemented by other donors. 
 
¶5. (SBU) USAID Mission staff have been in contact with the AsDB to 
seek background information about this initiative.  Consultations 
with a range of contacts indicate that the pressure for the NTKH 
proposal came from Government of Indonesia (GOI) sources, including 
the military.  AsDB staff are concerned about possible consequences 
of such a project and noted that the GOI is constructing three 
sections of the NTKH.  The pre-feasibility study aims to ensure the 
proper completion of the environmental assessment, including 
determining alternate routings and possible recommendations not to 
build any sections at all in sensitive areas. 
 
¶6. (SBU) An AsDB complementary technical assistance project will 
support environmental management in the Heart of Borneo area.  AsDB 
is reaching out to the public, and conducted a workshop this week 
about its safeguard policies on the environment, involuntary 
resettlement, and indigenous peoples. A contingent of NGOs, however, 
held a protest at the workshop expressing general opposition to 
loans to the central government and skepticism about safeguards 
being effective, particularly with respect to roads in forest areas. 
 
 
¶7. (SBU) The Post looks forward to a readout of the AsDB Board 
meeting and plans to continue to monitor developments on the ground. 
The Mission point of contact for this activity is Suzanne Billharz 
at USAID. 
 
HEFFERN