The Big Picture
               Peatland, Development, Forestry
                       & Conservation




27 June 2012                  1
June 2012                                        1
Global demand for fibre is increasing
•   The World’s population could
    reach 9.2 billion people by 2050
    (UN)
•   Fibre from planted forests will
    need to increase from 800 million
    cubic metres to 2.7 billion cubic
    metres by 2050 (WBCSD Vision
    2050)
•   Responsible plantation
    development now - sustainable
    fibre for the future
•   Indonesia – a real opportunity to
    lead the World in this sector: tree
    growth rates, land availability,
    cost of production, ability to
    invest in technology and capacity,
    productivity and proximity to key
    growth markets
                                            2
Riau – driver of national development
• Riau accounted for 6.5% of
  Indonesia’s national GDP in
  2010
• Population in 2010 of 6
  million, up almost 100% in 20
  years
• Private sector – key to
  increasing Riau’s GDP by
  250% in the past 5 years
• Poverty as a % of the
  population reduced by almost
  30% since 2007

                                         3
Forestry – helping the economy
  • RAPP has contributed IDR 196
    trillion (USD 21.7 billion) to the
    National Output
  • 6.9% of Riau Province’s
    economic output
  • 6.1% of Riau’s gross regional
    domestic product (GRDP)
  • 5.4% of all household income in
    Riau
  • Employment opportunities in
    Riau for 90,000 people in 2010
  • Multiplier on Provincial output
    of 2.29 times, 2.36 times on
    household income and 5.7
    times on employment

Source: 2010 University of Indonesia study covering 1999 –
2010                                                         4
Forestry – helping people
    Focused on education, health
    and infrastructure – covering
    140 villages and 3,000 families
•   Free medical treatment for 36,700
    people
•   500 farmers trained in integrated
    farming
•   76,000Ha of community livelihood
    projects
•   5,000 local community jobs
    through SMEs
•   2,800 scholarships up to senior
    high school
•   Training activities for 150 teachers
•   Constructed and renovated 20
    school buildings since 2008
                                           5
A key question - answered
Why we operate on peatland…
• We saw a commercial
  opportunity 20 years ago to
  become a key plantation-based
  fibre supplier
• Riau had a development
  imperative
• Government concessions on
  peatland were available
• A profitable business – that
  supports investment in science
  and development of responsible
  land management



                                      6
The most important questions
Consider that:                     The real questions to our
                                   mind are therefore:
• 40% of Riau is on peatland -   • How can the areas of peat
  mineral soil developed first     already converted or
  and now scarce                   degraded be best managed
• 85% of that peatland is          - to further Riau’s agenda
  already degraded or              AND contribute to
  converted for agricultural       environmental goals?
  uses
• Just 15% of peatland           • How can the peatland forest
  remains intact and of strong     in good condition be
  conservation value               conserved and protected –
                                   real time, real world?
                                                             7
Conservation – key learnings
•   A journey of almost 20 years
•   Our model has evolved – starting
    with a “Western Model” e.g.
    contribute land to national parks
•   We’ve learned over time that
    doesn’t always work
•   Then we adopted HCVF – and
    have learned that only works
    under certain conditions
•   Now our focus is on:
     -   Conservation areas that we can
         protect
     -   Multiple buffer zones protecting
         the core
     -   Water management to
         maintain/improve water levels



                                            8
Our Plantations in Practice
     Our plantations in practice
 Conserving forest since 2005
 36 HCV assessments
 200,000 hectares of forest conserved
 Added 35% to existing natural forest
   protected by government in Riau
 Continuous community development
 No-burn policy and active fire
   management
 Energy self-sufficiency and chemical
   use reduction
 Continual improvement of water, soil
   and crop management based on
   science
 Plantations used as buffers to protect
   peat dome
                                           9
The alternatives are stark
        Unmanaged Land                  RAPP Sustainable Land
                                             Management

•   Poverty and population         •   Adhere to regulations
    pressures drive encroachment   •   Protect conservation forests
•   Highly organised illegal       •   Rapidly replanted trees
    logging                        •   Active fire fighting - “no
•   Slash & burn farming               burn”
•   No designated conservation     •   Sophisticated water
    areas                              management
•   Unregulated development        •   Infrastructure for
•   No sustainability planning
                                       communities
•   Zero care for
                                   •   Significant international
    workers/community
    development
                                       scrutiny
•   Loss of export income          •   Jobs instead of illegal
                                       logging
                                   •   Economic multiplier effect 10
RAPP peatland management
•   Protection of critical headwater
    peat areas to maintain the
    integrity of the peat dome
•   Water management practices
    that ensure water levels
    compared to “At Take Over”
    levels are managed
•   Plantations that ring conservation
    areas discouraging
    encroachment, illegal logging,
    unmanaged drainage
•   Continually treed buffer zone
    between our plantation and
    natural forest to further influence
    water levels
•   Review and adjust plantation
    practices to maximise tree
    canopy cover, improve soil and
    water protection
                                          11
Peatland & Carbon
Overall goals in regard to carbon emissions and peatland:

     Establish a verifiable baseline range of carbon emissions from the
      concessions at the point at which we took them over and variations to
      current emissions levels

     Establish a total carbon emissions footprint from all of our current
      operations and activities combined

     Measure and progressively improve effectiveness of carbon emission
      reduction initiatives

     Determine a carbon emissions mitigation plan for the long term,
      towards stable, sustainable land use – now and for the future



                                                                             12
More work to be done
•   Embarked on a comprehensive and long-range programme with a number of third-
    party experts to build knowledge about carbon emission

•   Commissioned or participating in a number of scientific projects to gain a more
    complete picture of the relationships between peatland, carbon and forestry
    activities

•   Activities include:

      Pioneering participation in a Monitoring, Reporting and Verification (MRV)
       programme undertaken by independent third parties on behalf of the
       Indonesia government measuring against 19 indicators relevant to peatland

      Facilitating field work and other scientific study by the Bogor Institute,
       Hokkaido University and other academic bodies focused on peatland




                                                                                      13
In summary…
• Some see plantations and effective peatland
  management as contradictory
• We see responsible plantation development as a
  real-world solution – balancing development,
  sustainability and conservation
• The alternatives are stark
• We continue to develop knowledge and best
  practices
• John Bathgate will provide detail

                                                   14
The Big Picture
               Peatland, Development, Forestry
                       & Conservation




27 June 2012                  15
June 2012                                        15

Responsibly Managed Plantations On Peatland – A Positive Story

  • 1.
    The Big Picture Peatland, Development, Forestry & Conservation 27 June 2012 1 June 2012 1
  • 2.
    Global demand forfibre is increasing • The World’s population could reach 9.2 billion people by 2050 (UN) • Fibre from planted forests will need to increase from 800 million cubic metres to 2.7 billion cubic metres by 2050 (WBCSD Vision 2050) • Responsible plantation development now - sustainable fibre for the future • Indonesia – a real opportunity to lead the World in this sector: tree growth rates, land availability, cost of production, ability to invest in technology and capacity, productivity and proximity to key growth markets 2
  • 3.
    Riau – driverof national development • Riau accounted for 6.5% of Indonesia’s national GDP in 2010 • Population in 2010 of 6 million, up almost 100% in 20 years • Private sector – key to increasing Riau’s GDP by 250% in the past 5 years • Poverty as a % of the population reduced by almost 30% since 2007 3
  • 4.
    Forestry – helpingthe economy • RAPP has contributed IDR 196 trillion (USD 21.7 billion) to the National Output • 6.9% of Riau Province’s economic output • 6.1% of Riau’s gross regional domestic product (GRDP) • 5.4% of all household income in Riau • Employment opportunities in Riau for 90,000 people in 2010 • Multiplier on Provincial output of 2.29 times, 2.36 times on household income and 5.7 times on employment Source: 2010 University of Indonesia study covering 1999 – 2010 4
  • 5.
    Forestry – helpingpeople Focused on education, health and infrastructure – covering 140 villages and 3,000 families • Free medical treatment for 36,700 people • 500 farmers trained in integrated farming • 76,000Ha of community livelihood projects • 5,000 local community jobs through SMEs • 2,800 scholarships up to senior high school • Training activities for 150 teachers • Constructed and renovated 20 school buildings since 2008 5
  • 6.
    A key question- answered Why we operate on peatland… • We saw a commercial opportunity 20 years ago to become a key plantation-based fibre supplier • Riau had a development imperative • Government concessions on peatland were available • A profitable business – that supports investment in science and development of responsible land management 6
  • 7.
    The most importantquestions Consider that: The real questions to our mind are therefore: • 40% of Riau is on peatland - • How can the areas of peat mineral soil developed first already converted or and now scarce degraded be best managed • 85% of that peatland is - to further Riau’s agenda already degraded or AND contribute to converted for agricultural environmental goals? uses • Just 15% of peatland • How can the peatland forest remains intact and of strong in good condition be conservation value conserved and protected – real time, real world? 7
  • 8.
    Conservation – keylearnings • A journey of almost 20 years • Our model has evolved – starting with a “Western Model” e.g. contribute land to national parks • We’ve learned over time that doesn’t always work • Then we adopted HCVF – and have learned that only works under certain conditions • Now our focus is on: - Conservation areas that we can protect - Multiple buffer zones protecting the core - Water management to maintain/improve water levels 8
  • 9.
    Our Plantations inPractice Our plantations in practice  Conserving forest since 2005  36 HCV assessments  200,000 hectares of forest conserved  Added 35% to existing natural forest protected by government in Riau  Continuous community development  No-burn policy and active fire management  Energy self-sufficiency and chemical use reduction  Continual improvement of water, soil and crop management based on science  Plantations used as buffers to protect peat dome 9
  • 10.
    The alternatives arestark Unmanaged Land RAPP Sustainable Land Management • Poverty and population • Adhere to regulations pressures drive encroachment • Protect conservation forests • Highly organised illegal • Rapidly replanted trees logging • Active fire fighting - “no • Slash & burn farming burn” • No designated conservation • Sophisticated water areas management • Unregulated development • Infrastructure for • No sustainability planning communities • Zero care for • Significant international workers/community development scrutiny • Loss of export income • Jobs instead of illegal logging • Economic multiplier effect 10
  • 11.
    RAPP peatland management • Protection of critical headwater peat areas to maintain the integrity of the peat dome • Water management practices that ensure water levels compared to “At Take Over” levels are managed • Plantations that ring conservation areas discouraging encroachment, illegal logging, unmanaged drainage • Continually treed buffer zone between our plantation and natural forest to further influence water levels • Review and adjust plantation practices to maximise tree canopy cover, improve soil and water protection 11
  • 12.
    Peatland & Carbon Overallgoals in regard to carbon emissions and peatland:  Establish a verifiable baseline range of carbon emissions from the concessions at the point at which we took them over and variations to current emissions levels  Establish a total carbon emissions footprint from all of our current operations and activities combined  Measure and progressively improve effectiveness of carbon emission reduction initiatives  Determine a carbon emissions mitigation plan for the long term, towards stable, sustainable land use – now and for the future 12
  • 13.
    More work tobe done • Embarked on a comprehensive and long-range programme with a number of third- party experts to build knowledge about carbon emission • Commissioned or participating in a number of scientific projects to gain a more complete picture of the relationships between peatland, carbon and forestry activities • Activities include:  Pioneering participation in a Monitoring, Reporting and Verification (MRV) programme undertaken by independent third parties on behalf of the Indonesia government measuring against 19 indicators relevant to peatland  Facilitating field work and other scientific study by the Bogor Institute, Hokkaido University and other academic bodies focused on peatland 13
  • 14.
    In summary… • Somesee plantations and effective peatland management as contradictory • We see responsible plantation development as a real-world solution – balancing development, sustainability and conservation • The alternatives are stark • We continue to develop knowledge and best practices • John Bathgate will provide detail 14
  • 15.
    The Big Picture Peatland, Development, Forestry & Conservation 27 June 2012 15 June 2012 15