by Uli Arta Siagian (WALHI/Friends of the Earth Indonesia)
Biodiversity offsets and credits fail because nature is not interchangeable. Damage in one place cannot be
balanced by protecting or restoring nature elsewhere. Habitats, species, and ecological functions are tied to specific places, histories, and social relationships.
Scientific reviews show ecosystems are partly irreplaceable and offsets risk weakening regulation (Moreno-Mateos et al., 2015). Friends of the Earth International (2024) argues these schemes drive ecosystem damage and violate Indigenous Peoples’ rights. Just one example: the Martabe gold mine in Batang Toru shows how offsets enable destruction while others bear the cost.
In North Sumatra, the Batang Toru ecosystem holds the Tapanuli orangutan, the world’s rarest great ape, with fewer than 800 individuals left. Its forest provides water, farmland, and incense resin for nearby communities. WALHI reports that the Martabe gold mine’s work area overlaps the headwaters of five major river basins supplying nearly 100,000 people.
PT Agincourt Resources (PTAR), the mine’s operator, claims mining and conservation can coexist through the mitigation hierarchy and a biodiversity offset, including a planned protected area of around 5,700 hectares. Yet civil society’s review of the environmental impact assessment states that the planned tailings storage facility covers 583 hectares, including 195.2 hectares of green land where 185,884 trees would be lost. The document acknowledges a very high potential for
habitat fragmentation.
Offsets are legitimate only for residual impacts after harm has been avoided and minimized. For a Critically Endangered species in a Key Biodiversity Area, some losses cannot be compensated: hectares elsewhere cannot replace specific habitat functions. Offset locations and metrics remain undisclosed, making the “no net loss” claim unverifiable. Gold is extracted in years, while forests need generations to recover.
Field interviews indicate that land in several South Tapanuli villages has been secured through purchases and long-term leases amid economic pressure. Some villagers reportedly were not informed that their land would serve as an offset or who funded it. Communal land often lacks legal title, leaving communities with social ownership while outsiders bring cash and legal certainty. In one customary community, a lease offer divided people defending their territory. This is not free, prior and informed consent (FPIC).
Indonesia’s 2024 Conservation Law introduces “preservation areas.” Under Article 9, landholders unwilling to undertake conservation activities must release their land rights with compensation. Parts of the offset area have been proposed for this status. WALHI fears forest guardians could become threats on their own land while companies claim conservation benefits. This precedent could spread among extractive companies, contradicting the Kunming-Montreal Global Biodiversity Framework’s principles of rights, participation, and policy coherence.
Protecting biodiversity means stopping the sources of its destruction
Protection requires addressing extractive industries and development that consume space and violate human rights. As long as these continue, offsets justify new harm. Stop the damage first.
Funding must come from public budgets and the polluter-pays principle, not companies causing harm and claiming compensation. Funds must go directly to Indigenous Peoples and local communities who protect forests, alongside recognition of customary territories, community-managed areas, Indigenous knowledge, and traditional practices.
The government should halt new clearing, publish all offset data, and refrain from designating preservation areas on customary land without genuine consent. Funders should suspend financing until these conditions are met.
What cannot be replaced cannot be redeemed by an offset.
A forest cannot be conserved by taking it from the people who have kept it standing.