Indonesia has terminated a long-standing agreement with Norway to reduce carbon emissions from deforestation due to lack of payment from Oslo’s $1 billion grant.
The Indonesian Ministry of Foreign Affairs announced the decision on Friday “after a series of thorough inter-ministerial consultations.” The Ministry said it had notified the Norwegian Embassy in Jakarta about the cancellation of the deal.
“The decision is also based on the lack of concrete progress on the implementation of the obligation of the government of Norway to deliver the results-based payment for Indonesia’s achievement in reducing 11,2 million CO2eq greenhouse gas emissions in 2016/2017, that an international organisation has verified,” the statement read.
The decade-long pact was founded in a Letter of Intent (LOI) signed between the two countries in 2010 under the REDD+ (reducing emissions from deforestation and forest degradation) mechanism. Although Indonesia cited Norway’s failure to pay the promised $56 million in grant money, Norwegian officials indicated that the country had been willing to pay.
The funds were part of a $1 billion grant promised by Norway under the REDD+ scheme if Indonesia could limit its emissions from deforestation and forest degradation.
Responding to Jakarta’s announcement, the Norwegian government stated that both governments had been engaged in discussions on a legal agreement to transfer the result-based payment. The contribution was to be disbursed to the newly established Indonesian Environment Fund (IEF). “Up until today’s termination announcement, discussions in this regard were ongoing and in Norway’s view constructive and progressing well, within the frameworks set by our two countries’ regulatory limits,” the Norwegian government said in a press statement.
Despite the end of this deal, Norway said it would continue to support Indonesia’s efforts to combat deforestation. “Given our commitments in the Letter of Intent, and Indonesia’s impressive results, we were looking forward to supporting Indonesia’s efforts with similarly significant annual contributions in the years to come,” the Norwegian government said. “We have highly appreciated our collaboration and stand ready to continue supporting–in mutually agreeable ways– Indonesia’s efforts in protecting its forests and peatlands,” it added.
Meanwhile, the Indonesian Foreign Ministry said the revocation wouldn’t affect Indonesia’s commitment to reduce greenhouse gas emissions and tackle climate change. “Indonesia has recorded many significant progress and achievements to fulfil its obligation under the Paris Agreement, which has been ratified, including in attaining sustainable development goals (SDGs),” it stated, adding, “Indonesia’s achievement can also be seen, among others, on the lowest rate of deforestation in the past 20 years, including the significant reduction in forest fires.”