Environmental Sustainability: UK-Indonesia Collaboration

Debate between Kerry McCarthy and Barry Gardiner

Tuesday 23rd June 2026 Westminster Hall

[Kerry McCarthy]

I certainly think that peatlands are incredibly important. It has been one of my frustrations that we put so much emphasis on forests, and on the UK on planting trees—like a race to how many millions of trees each party can pledge to plant—whereas, as the hon. Member says, the carbon sequestration impact of peatlands is greater. We need to do much more to protect them, including, I would say, banning horticultural peat, which I know she has campaigned long and hard for.

I will come on to the question of climate finance later, but I will say that we are in a world in which public money is under severe constraints. The USA, for example, has pulled out of its commitments under COP. I want to see a lot more done to use public money, and philanthropic money, as a catalyst to leverage in far more private sector funding, including through things such as the voluntary carbon and nature markets, so that we can get that finance into protecting our forests, our peatlands and, indeed, our marine environment, which I will touch on a bit later as well.

[Barry Gardiner (Brent West) (Lab)]

My hon. Friend is talking about peatlands; she will know that Indonesia had a huge, deep burn of its peatlands in 2019, with 31,000 sq km of land burned. In the UK, when we had a terrible peatland fire on Saddleworth moor in 2018, just the year before, an estimated 4.5 million people suffered from the particulate matter—the smoke that went into their lungs—and the health conditions caused by that. Keeping those peatlands moist, damp and wetted in Indonesia is so important. My hon. Friend rightly talked about the population of Indonesia being so large; it is so concentrated that it can be desperately affected by that health risk.

[Kerry McCarthy]

I very much agree. We both spent the Easter recess wading through peatlands. I was going to say that we were wading up to our knees; I was wading up to my knees, but for everyone else there the peat came up to about mid-calf on them. I had very short wellies on, too—I was given children’s ones. There was an awful lot of squelching going on. Nevertheless, it was amazing to see the richness of the peatlands. We also took boats along the river. The water there is brown—apparently it is entirely drinkable—because of the peat in the water supply. I very much agree that stopping peatland fires and underground burning are as important as stopping the wildfires that destroy our forests.

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[Kerry McCarthy]

I absolutely agree. I have just come from an event that Fairtrade is hosting in the Inter-Parliamentary Union room, at which people were talking, among other things, about the forest risk commodities legislation—I will come on to that later, because the Government have announced regulations today—and about the cost to smallholders and indigenous communities of complying with it. Of course, we want to ensure sustainability and stamp out deforestation in the supply chain, but we have to remember that there are small farmers and indigenous communities whose livelihoods depend on that.

At Easter, a number of us went to Indonesia—Borneo, in particular—and met communities doing agroforestry projects. We were looking at how we could support them. It was mostly about orangutans, which I will talk about at some length in a moment, but the people matter very much too.

[Barry Gardiner]

This is an essential point. My hon. Friend will remember the words of Pak Ja Martin, who was in charge of the project that we went to see. He said, “You can’t talk conservation to people who are hungry.” Therefore, local indigenous people, who for centuries have protected and conserved their environment, must be involved. That was a key aspect of what we went to look at.

[Kerry McCarthy]

I could not agree more. I really appreciate all the interventions, which are a very good way of getting the debate flowing, but it is quite easy for me to lose my place. I was talking about the impact of mining, logging and urbanisation, and about the fact that forest and peatlands have been damaged by wild fires. I will come on to the marine environment later.

The UK has been at the forefront of efforts to help reverse these problems. In a joint statement in November 2024, our Prime Minister and the President of Indonesia agreed a new strategic partnership, underpinned by people, planet, prosperity and peace. It included a commitment to address illegal, unregulated and unreported fishing, conservation of ocean species, sustainable supply chains and food security.

At COP29 in Baku in 2024, we pledged £239 million to halt and reverse deforestation in forest-rich nations that act as critical carbon sinks, including Indonesia. The measures included £188 million for high-integrity forest carbon markets, £48 million for blended finance for forest programmes to attract private investment and £3 million for the United Nations framework convention on climate change to support communities to benefit from forest restoration.

We have also funded some specific Indonesia programmes, including UK Partnering for Accelerated Climate Transitions, which covers low-carbon transportation and energy efficiency. Phase 5 of a 20-year forestry programme looking at timber governance, legislation and regulation has had £12 million from us. The UK partnered with Jakarta and funded the Nature Transition Support programme for biodiversity protection in key national parks and pioneer carbon and biodiversity credit markets. The Climate and Ocean Adaptation and Sustainable Transition programme is funded by the UK’s Blue Planet fund. I have several more things on my list, but I am slightly worried that I will steal the Minister’s thunder. I suspect that she will tell us a bit about what the UK has done, so I will save them for her. As I say, good things have happened, but I will now focus on the challenges.

I have been fortunate enough to visit Indonesia twice in the last couple of years. In April 2025, as the then Climate Minister, I represented the UK at the Forest, Agriculture and Commodity Trade dialogue meeting in Malaysia. Indonesia had been co-chair of the dialogue with the UK, but was handing over to Malaysia, so my visit took in both countries. The discussion mostly focused on palm oil, as hon. Members would expect, and the theme of the dialogue was smallholders. I think I am right in saying that, in both countries, about 50% of palm oil production comes from smallholders. Although it is easy for the larger agricultural concerns to monitor regulations, comply with the certification and do all the bureaucracy that is involved in that, it is much more difficult for smallholders. As we have said, we need to bear their needs and livelihoods in mind.

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[Kerry McCarthy]

I was going to wind my hon. Friend up by saying that I have no idea how big Leeds is—slightly bigger than Bristol, I think—but he is right that delay has consequences. I gather that the Government have announced a consultation now, but we do not want that to drag on. We must ensure that it is a genuine consultation, but that it is time-limited and that action follows as swiftly as possible.

[Barry Gardiner]

My hon. Friend makes an excellent point. Does she agree that, as part of that consultation, many of us would like the Government to consider that this should not just be a matter of legality, but of actual deforestation? She will know of cases where other countries have passed similar legislation; in Brazil, its then President changed the law to make sure that the companies that were deforesting were able to comply with our legislation, and therefore to continue the trade. There is a loophole here. Does my hon. Friend agree that the consultation would do well to close it?

[Kerry McCarthy]

My hon. Friend is right. One of my concerns was that Bolsonaro was making legal what should clearly have been illegal. The counter-argument was that there was something slightly colonialist about dictating how a country should decide on what was sustainable for its own purposes, and there were some voices on that side.

As I understand it, the UK will start on the basis of what is illegal in the country from which we are sourcing the products, but the intention will be eventually to align with the EU regulation on deforestation-free products over time, and the ultimate goal is a blanket deforestation-free standard that would legally require products to be produced without any forest loss or land conversion whatever. That is the end goal; the EUDR has run into some problems and its implementation was delayed—it should have been at the end of last year, and now it may be at the end of this year—so the idea is that we move ahead with what we have already drafted under the Environment Act, and then better will follow. The British Retail Consortium today welcomed the announcement, which is another indication that business does want this change.

While regulation will help to prevent further destruction, we also need to mobilise finance to protect standing forests and restore what we have lost. Public funding from donor countries and philanthropy both have an important role but, as I said to the hon. Member for Strangford, we must look to the private sector if we are to close the forest finance gap. Indonesia is already benefiting from REDD+, or reducing emissions from deforestation and forest degradation, funding, which is a mixture of public and private finance, but we could do much more to scale that up.

Indonesia has a huge amount to offer investors, and I know they are looking to the UK to help them; in fact, just after I was in the country last year, the climate envoy arrived at the embassy to run some workshops on voluntary carbon and nature markets and how Indonesia could work with the UK on those. We are rightly seen as leaders, not least because London is one of the global financial capitals of the world. At COP29, I was proud to launch our six principles for voluntary carbon and nature market integrity, and last year we used London Climate Action Week to launch the Coalition to Grow Carbon Markets, which we co-chair alongside Kenya and Singapore.

However, I am somewhat concerned by the lack of progress since then. There was a Department for Energy Security and Net Zero consultation that closed nearly a year ago on 10 July. I have been trying to chase that up, and I gather that around 200 responses have been published, but the recommendations have yet to come forward. Maybe that is being saved up for London Climate Action Week; I very much hope it is, because I think the eyes of the world are on us to make this blended finance happen.

There is one issue that I will touch on only briefly, as I know that my hon. Friend the Member for Leeds Central and Headingley (Alex Sobel) will speak on it: the controversial plans for a food estate in West Papua. I have had some reassurances that that will not involve the destruction of healthy forests and that it is part of an important strategy to increase Indonesia’s food security—I can tell by the look on my hon. Friend’s face that that is not the account he has been given. However, as I said, I knew he was coming here to speak about that, and I know I can rely on him to speak about it with great expertise. The other assurance I have had recently is that Indonesia wants to move away from such a high dependence on the palm oil sector, diversify what it grows and increase its food security, but I will leave that to my hon. Friend to cover.

I want to talk instead about orangutans. My second visit to Indonesia was in April this year with the all-party parliamentary group on international conservation and Borneo Orangutan Survival UK. Three Members present today were on that visit, and I think it made a lasting impression on us. We took a very long and slow boat journey into East Kalimantan in the heart of Borneo and trekked through very rich, deep and, as I said, squelchy peatlands to see the work being done to restore primary rainforests. We also met people from the indigenous communities to see sustainable agroforestry in action.

The best part was that we spent a day at a forest school for orangutans, where they teach orphaned orangutans how to survive in the wild. Indonesia is home to three species of orangutans and they are all endangered. They are the most arboreal of all apes, spending around 80% of their lives in the rainforest canopy. Normally, their mothers teach them forest skills and how to survive in that way up to about the age of eight, but when they are orphaned, they go to forest school for about the same length of time. Then they go to university, where they practise semi-independent living. My hon. Friend the Member for Brent West and I each had the amazing privilege of releasing an orangutan—his was called Peanuts; mine was called Lanting—into their university island, where I hope they are thriving.

BOS is doing great work, but we need to do more to tackle the underlying reasons why so many orangutans need its help. I have already spoken at length about forest risk commodities and the destruction of habitats, but those are not the only factors. Many orangutans like Peanuts and Lanting have been displaced by development as Indonesia’s population and urbanisation grow. They are also very susceptible to human diseases such as tuberculosis, which they catch when humans start encroaching on their territory. I think all of us who went would agree that the saddest thing we saw at the forest school was the orangutans that could not be released from their cages because they carried diseases—particularly TB. They were clearly really unhappy animals and it was heartbreaking to see them. Under the law in Indonesia, they cannot be euthanised, because they are a protected species. However, there is some hope, because BOS is fundraising to create new habitats. There are going to be about 15 little islands where groups of infected orangutans—one male, a couple of females and the younger ones—will be able to experience freedom together without passing their diseases on to healthy animals. I look forward to seeing that come into play.

A sizeable number of the orangutans that BOS rescues have been trafficked—for example, stolen as babies to be pets or for private zoos. BOS has rescued around 50 from tourist attractions in Thailand. It has been three years since the UK passed the Animals (Low-Welfare Activities Abroad) Act 2023, which will ban the promotion by UK companies of tourist attractions abroad that involve animal cruelty and exploitation—for example, those where tigers are drugged and declawed, elephants are forced to perform or, as we saw on film in Borneo, orangutans are forced to take part in boxing matches. Yet we are still waiting for the Act to come into force, because the lawyers at DEFRA need to draft regulations. I am told that they are struggling to find the right words to put in the definitions to catch that type of cruelty and exploitation. My next note just says, “Get on with it.” They need to get on with it. There is no excuse for three years’ delay. As a lawyer, I am pretty sure they can find the words to deal with these things, even if it is just where animals are forced to perform unnatural acts or where they are drugged or declawed. They do not have to catch every type of animal abuse and exploitation; it would be a start to bring in regulations that catch at least some of it.

[Barry Gardiner]

My hon. Friend has been very generous in taking interventions. On the animals that had diseases—she is right, it was an affecting sight that depressed us all; it is great that the islands are being built—is she aware that at a recent lecture, Nadine, who we met in Oxford, confirmed that when orangutans are captured for translocation, they will now be tested for TB? That will enable scientists to study the epidemiology of the disease in the wild population. Of course, if it transpires that TB is already in the wild population, it could be safe to release them back into the wild.

[Kerry McCarthy]

It was good to talk to Nadine on the visit; she was a real source of expertise. I am glad to hear that, and if it is a possible answer to the issue, that is excellent.

I will talk a little about the marine environment. We have quite a lot of debates in this place about oceans and marine issues, so I will not say too much, but they are important to Indonesia. The country covers an area of around 8 million km², only a quarter of which is land. With around 17,000 islands, Indonesia is an ocean state, supporting coral reefs, mangroves and sea grass habitats that are vital for biodiversity and for human livelihoods such as fishing and tourism. It lies at the centre of the coral triangle, which is often called the “Amazon of the seas” because of its exceptional biodiversity, and has over 75% of the world’s coral species and more than a third of global reef fish species.

Indonesia’s marine environment is amazing—I have been diving there, so I can vouch for that—but it is also highly vulnerable. The reefs are under pressure from overfishing, destructive fishing practices such as blast fishing, pollution and overdevelopment. Rising sea temperatures cause coral bleaching, which weakens or kills reefs, while pollution and sedimentation reduce water quality. Indonesia has established hundreds of marine protected areas. Conservation zones reach tens of millions of hectares, and it has ambitious targets to expand them further to safeguard up to 30% of its marine territory by 2045, which would make it one of the largest marine conservation networks in the world.

Indonesia is also investing in marine conservation and restoration, including in coral reef rehabilitation programmes, stricter environmental regulations and innovative schemes such as the coral reef bond, which funds conservation projects based on measurable improvements in reef health. The UK has now passed the Biodiversity Beyond National Jurisdiction Act 2026, and although I understand that a few more steps must be taken before the global ocean treaty is finally ratified, I hope that we will be able to play a full role in January at the ocean COP in New York. The Minister is leading on that, so perhaps she can tell us a bit about it in her reply.

Indonesia is vital to us, and will become ever more so. Its economic success is important to us, as is its environment. I look forward to hearing what the Minister and other colleagues have to say.