VZCZCXRO5975
RR RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHJA #0890 1270112
ZNR UUUUU ZZH
R 060112Z MAY 08
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC 8919
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHKO/AMEMBASSY TOKYO 1930
RUEHBJ/AMEMBASSY BEIJING 5013
RUEHBY/AMEMBASSY CANBERRA 2452
RUEHUL/AMEMBASSY SEOUL 4568
RUEAIIA/CIA WASHDC

UNCLAS JAKARTA 000890 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR OES/ENRC, EAP/MTS, EAP/RSP 
USTR FOR MLINSCOTT, DBROOKS 
TREASURY FOR KBERG 
USAID FOR ANE, EGAT [CBARBER, MMELNICK] 
BANGKOK FOR RDM/A 
 
E.O. 12958: N/A 
TAGS: SENV EAID KGHG ECON PGOV ID
SUBJECT: INDONESIA'S SINAR MAS FORESTRY GROUP ON NGO PARTNERSHIPS, 
AREAS OF COOPERATION 
 
REF: JAKARTA 732 
 
¶1. (SBU) Asia Pulp & Paper (APP) and its Indonesian fiber supplier, 
Sinar Mas Forestry (SMF) wants to collaborate with environmental 
NGOs to improve the management and conservation value of its 
concessions, according to Fergus MacDonald, General Manager of 
Conservation Management.  He points out that SMF is undertaking 
conservation activities on its own, but needs the technical 
expertise and experience of environmental NGOs to do the job well. 
Despite a previous failed partnership between APP/SMF and Worldwide 
Fund for Nature (WWF), MacDonald (who happens to be a former WWF 
employee) says that he and his management colleagues would welcome 
the opportunity to discuss and clear up past "misunderstandings". 
This would pave the way for the company to work closely with other 
conservation NGOs such as Wildlife Conservation Society (WCS).  Post 
previously reported that bad blood between WWF and APP/SMF might be 
preventing a potential partnership with WCS (reftel). 
 
We're Trying to Be Good, Really 
------------------------------- 
¶2. (SBU) MacDonald told us that SMF is introducing conservation 
management plans for all its concessions (over 3 million hectares 
throughout Indonesia).  It also sets aside a higher proportion 
(anywhere from 3-15% more) of its concessions' land-area for 
conservation than the Indonesian requirement of 10%.  However, SMF's 
expertise is not conservation but profit, which is why the company 
needs expert NGOs to help it manage its concessions better. 
MacDonald acknowledges that ground realities might differ from SMF's 
stated objectives, but insists that SMF's top management is fully 
behind these conservation plans.  He also revealed that SMF is 
collaborating with an international NGO on orangutan conservation in 
Kalimantan.  That the NGO is unnamed due to a confidentiality 
agreement highlights the sensitivity over NGOs collaborating with 
companies like APP/SMF, which they view as among the worse forestry 
companies in terms of environmental practices. 
 
Land Tenure and Other Areas for Assistance 
------------------------------------------ 
¶3. (SBU) MacDonald highlighted the areas where NGOs can best assist 
SMF: 
-- Technical assistance (conservation studies and surveys in and 
around SMF forest concessions) leading to management strategies; 
-- Education and awareness training for SMF staff and local 
communities in/around concessions, including on human-animal 
conflict; and 
-- Implementation of conservation management strategies 
 
¶4. (SBU) MacDonald also emphasized another area of fundamental 
importance to conservation in general, and to SMF's business 
specifically: land use and tenure rights.  He lamented the frequent 
occurrence of encroachment on SMF holdings, noting that the company 
has often obtained concessions only to find anywhere from a few 
percent to one-half of the concession degraded or encroached upon. 
Not only does the unclear demarcation of property and land use 
rights in Indonesia hurt forestry and plantation companies, he 
pointed out; it also creates a situation that both allows and 
encourages encroachment, illegal logging, and unsustainable resource 
exploitation by individuals and communities alike.  NGOs that lobby 
and work with the central government as well as local governments to 
sort out spatial planning and land tenure would be doing everyone a 
great favor. 
 
HUME