PARIS, France- Indonesia's second-largest pulp and paper firm announced a US$100 million (S$141 million), 10-year investment on Tuesday (Dec 1) to more than double the peatforest area it will restore and protect the Kampar Peninsula in Riau Province on Sumatra island.
The peninsula, about three hours by boat from Singapore, contains one of the largest remaining peatswamp forests in Sumatra and is rich in wildlife.
Conservationists have long called for Kampar to be set aside as a conservation zone and for a halt to all forest clearance and development of pulp and paper and oil palm plantations there. At 700,000 ha, Kampar is about 10 times the size of Singapore.
Asia Pacific Resources International Holdings Limited (April), which has plantations on the outer edge of the peninsula, said it will increase its peatland forest conservation zone in central Kampar to 150,000 ha from 70,000 ha and has completed the purchase of the land.
The announcement on the sidelines of a major global climate change conference in Paris comes weeks after deadly forest and land fires, many on peatlands, burned more than 2 million hectares in Indonesia and sickened more than 500,000 people.
The fires underscored the urgent need for the government to overhaul its land use rules and for companies to invest more in better land management practises.
In an interview, Mr Anderson Tanoto, Director of April Group, said there was a strong business case for the project, called the Riau Ecosystem Restoration (RER).
Restoring and conserving the core of the peninsula would bring benefits such as preserving remaining forests, improve local community livelihoods, reduce fire risks and preserve water flows that feed local rivers.
"I'm genuinely worried about the future," he said, referring environmental damage and the risk from fires.
"Nobody wins with fires. Everyone loses," he told The Straits Times during the project launch. "This year is a very sobering reminder for all of us that even with zero-deforestation pledges by companies, on the ground the fires are still raging."
He acknowledged the investment was a reflection of how the company, long vilified by NGOs for large-scale deforestation, has changed.
"It's a different stage of the company. Over the last 5 years, we've asked ourselves what went right, what we did not do right," said Mr Tanoto, 26, a graduate from Wharton Business School in the United States.
"We're not perfect and that's why we've been trying to bring in outside expertise," he said, pointing to the need to further improve the development of the RER project.
The dense peat at the core of the peninsula is one of Sumatra's largest stores of carbon, which if cleared and drained, would release huge amounts of greenhouse gas emissions and leave the area prone to fires.
Peatlands also subside when drained,so it makes sense for companies to limit drainage and keep water levels high in peatlands to minimise fire risk.
Mr Tanoto said the investment, among the largest by a private company for a single conservation project in Indonesia, would be split roughly half each between conservation and restoration.
Money would be spent on building ranger camps, training, replanting and developing nurseries. Mr Tanoto also wanted to look at ecotourism and other opportunities to make the project financially viable over the longer term.
NGOs, while welcoming conservation efforts to protect Kampar, say the presence of plantations on the edge of the peninsula risks continued drainage of the peatswamp core, which is shaped like a dome.
But Mr Tanoto denied this, saying none of April's plantation drainage canals were linked to the core area. "We don't drain any water from the peatland core. It's a completely separate water management system."
In future, he said the aim was to further expand the project by a further 160,000 ha by either acquiring the remaining conservation area in the central region from the government or going into partnership with the government.