Abe Silangit & Fidelis E. Satriastanti, Oslo – President Susilo Bambang Yudhoyono announced on Wednesday that Indonesia would stop issuing new concessions for peatlands and natural forests for two years, effectively imposing a temporary halt on deforestation.

The decision was part of a deal reached with Norway, which has agreed to grant $1 billion to help preserve the Indonesian forests.

"We will conduct a moratorium for two years where we stop the conversion of peatland forest," Yudhoyono said at a joint news conference with Norwegian Prime Minister Jens Stoltenberg.

"Sufficient non-forest lands exist for Indonesia to accommodate the growth of its vitally important plantation industries, a major source of livelihoods," the Indonesian government delegation in Oslo said.

The agreement will be legally binding once Norway signs a deal with the financial institution managing the fund. Fitrian Ardiansyah, World Wildlife Fund Indonesia's climate and energy director, welcomed the move but said it still depended on how the government treated the moratorium.

"It could be a good opportunity if those two years were used to review development plans to decide whether programs such as the Merauke food estate are beneficial."

The massive Merauke Integrated Food and Energy Estate in Papua, activists say, will see more than 1.1 million hectares of forests felled. Presidential climate adviser Agus Purnomo said, "we will work it out so that there will be no peatlands converted."

But Elfian Effendi of Greenomics Indonesia was unconvinced. "I'm sure in the process Norway will be disappointed with Indonesia in keeping the agreement."

Greenomics said earlier this year that the Ministry of Forestry's proposed forestry program put about 3.4 million hectares of forests at risk of development over the next 10 years.