BREAKING: Norway Flip Flops on Deforestation Payment Commitment to Indonesia

Indonesia’s Foreign Ministry has announced that the Government of Indonesia will terminate its agreement with Norway on Reducing Emissions from Deforestation and Forest Degradation (“REDD”), just months after posting its lowest deforestation on record.

The move came after Norway continued to delay payments of approximately USD56 million to Indonesia for its deforestation reduction efforts, despite Indonesian meeting deforestation targets and fulfilling its obligations under the agreement.  

It is understood from numerous public sources that the termination was made because NORAD, Norway’s aid agency, was seeking to place additional conditions on the payments. The Jakarta Post has reported that these included stipulations on the disbursement of the funds and additional due diligence work on the government agencies that would be distributing the funds.

This prompted Indonesia’s Deputy Environment Minister Alue Dohong to state: “We were wasting our time.”

As has been pointed out numerous times by Palm Oil Monitor, NORAD had granted significant sums of money to NGOs that were actively campaigning against Indonesian palm oil and palm oil certification systems in other markets, such as the United States, EU and UK.

This prompted some attacks by Indonesian politicians on NORAD’s activity in Indonesia.

A new funding round under the NORAD NGO program was announced at the end of July, which may well have added to Indonesia’s concerns about its relationship with Norway.

The move by Norway does not bode well for the upcoming climate conference in Glasgow later this year, where developed countries will be seeking greater commitments from developing countries on forest and climate.