The Nusantara Capital City (IKN) Authority will grant miners tax incentives for help in carrying out forest rehabilitation in the planned capital city, in a move seen by environmental groups as a failure to hold polluters accountable and which could see damaged land in other areas being left unattended.

The government has envisioned the planned capital city as a green and low-emission forest city, which includes ecotourism.

The government sees a need to rehabilitate around 120,000 hectares of land in the future capital city, said Pungky Widiaryanto, IKN Authority director of forestry and water-resources utilization, Kontan reported on Dec. 27.

It plans on doing so by granting miners tax reductions of up to 200 percent from taxable income based on the expense required to carry out the task.

Myrna Asnawati Safitri, IKN Authority deputy for environment and natural resources, said in an online briefing on Dec. 29 that it would not be obligatory for these companies to fulfill their rehabilitation duty in Nusantara.

Aside from mining, the tax incentives also apply to other degraded lands in the new capital area caused by the plantation and monoculture forestry sectors, she said.

For instance, Sepaku, the district within which the capital is located, is surrounded by eucalyptus forests for pulp and paper production, according to Reuters.

M. Jamil, who heads the law division at environmental group Mining Advocacy Network (Jatam), said restoring forests should be the responsibility of those who damaged the land in the first place. He added that it did not make any sense to expect other firms to fix what irresponsible parties had previously done.

“It reflects the government’s failure to hold the [land-destruction] culprits accountable,” Jamil told The Jakarta Post on Dec. 29.

“I think it’s just wrong to use [these incentives] to erase wrongdoing from the previous parties that damaged the land,” he added.

Companies carrying out business activities in the forest areas under the Approval for Forest Area Use (PPKH), face several environmental-conservation obligations, according to Pungky of the IKN Authority, including rehabilitating forest outside their concession areas on a one-to-one basis.

The mechanism is called watershed rehabilitation (DAS Rehab), he said, which some companies may find challenging to realize as it is often quite difficult to look for suitable locations to meet those obligations.

“On the other hand, Nusantara has a large area that needs restoration. Thus, the IKN Authority will allocate land in the new capital area to help PPKH holders carry out their rehabilitation obligations. This is in line with the new capital forest restoration efforts,” Pungky told the Post on Dec. 29.

He added that the Environment and Forestry Ministry would be the body that determined whether PPKH holders can rehabilitate forests in the new capital.

Before the launch of the new capital construction, secondary forest only covered 16 percent in the planned city due to a deforestation rate of 1,000 ha per year, according to Pungky. Therefore, the IKN Authority has designated 177,000 ha as protected or green areas.

Indonesia’s new capital city encompasses 256,142 ha of land, but 199,962 ha of this was damaged due to mining, with the rest remaining untouched, according to climate advocacy group Tuk Indonesia.

Linda Rosalina, the executive director of TuK Indonesia said on Dec. 28 the government must identify all companies behind the land degradation and hold them accountable for their responsibility to rehabilitate the new capital city area.

Aryanto Nugroho, the national coordinator of Publish What You Pay (PWYP) Indonesia, said he was concerned that the policy would make rehabilitation efforts in the mining and watershed areas near the actual concessions less holistic and would likely leave more urgent problems unattended.

“Rehabilitation of the watershed area is the company’s obligation, with or without other incentives. If you transfer the rehabilitation obligation for the watershed area to Nusantara with these incentives, this is a setback,” he said on Thursday.

Agung Wicaksono, IKN Authority deputy of funding and investment, said during an online briefing on Dec. 29 that the planned tax deduction was not exclusively granted to miners, but also applied to other development efforts in the future capital city. For instance, research and development programs are granted 300 percent tax deductions, he said.

Source: The Jakarta Post