Environmental Sustainability: UK-Indonesia Collaboration

Jim Shannon Excerpts

Tuesday 23rd June 2026 Westminster Hall

[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.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Lady for rightly securing this debate. She has given us some of the problems and, in her intervention, the hon. Member for Glastonbury and Somerton (Sarah Dyke) suggested some of the things that could happen to solve them.

Back home in Northern Ireland, we have a number of small and medium-sized green tech businesses. They are innovative firms, who have new ideas about how to do things. Although I am not smarter than anybody else, I think that in Northern Ireland we are capable of giving some help to others.

Might there be access for companies in Strangford to bidding pipelines or other international investments, to ensure that we can help? Obviously, it would be at a price, because that is how businesses operate; they exist to make a profit. If that is possible, perhaps the hon. Lady would be kind enough to direct me on the right way to go.

[Kerry McCarthy]

I direct the hon. Gentleman to the Minister, because she is the one with the power to put him in touch with the embassy, for example.

However, I know exactly what the hon. Gentleman is saying. I was at the desertification COP in Riyadh in December 2024, which was all about land degradation and water scarcity. I went to the UK stand, which had a number of British investors. What really struck home with me there was a small company in my constituency called LettUs Grow, which grows salad vegetables through aeroponics, so no water is required and the company has a very low carbon footprint.

It was brilliant to see out in Riyadh that countries such as Jordan and Iraq, which are managing extreme water scarcity, were aware that a company in Bristol might be of use to them in future. We need to use opportunities such as those showcases at COPs to illustrate what we do, so that our companies can find buyers in the markets that need their products the most.

[Jim Shannon]

If Members have not had the chance to go to it already, I will just let them know that the British Red Cross is holding an event in a dining room A or B today. Earlier, I was talking to a young lady who is doing some work in Nepal on water issues, including water shortage. There is flooding in Nepal, but it is projected that in about 20 years’ time there will perhaps be a water shortage in the country. The British Red Cross might have some innovations or ideas for Nepal. The hon. Lady and I both know the British Red Cross; I know that she knows it very well. There is an organisation that perhaps could help, too.

[Kerry McCarthy]

The hon. Member makes a very important point. At Foreign Office questions last week, I had the first question on the Order Paper, which was very ably answered by my hon. Friend the Minister. My question was about the Tibetan plateau, the environmental degradation there and what China is doing to divert water sources. Obviously, Nepal is part of that situation, as it is in the Himalayas. I think that a fifth of the world’s population depends on the Tibetan plateau for water sources.

If the hon. Gentleman seeks out the answer that the Minister gave me on that occasion, he will see that we have quite a few international initiatives that try to ensure that people get access to the water that they need.

If Indonesia is under threat environmentally, that affects us all, as I think some interventions today have already illustrated. Over recent decades, Indonesia has lost hundreds of thousands of hectares of forest each year. The main drivers of that loss are unsustainable agriculture, especially palm oil production, legal and illegal logging, mining, and rapid urbanisation.

--- Later in debate ---

[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.

[Jim Shannon]

The hon. Member for Brent West (Barry Gardiner) said that the first thing for people is always to feed their children and look after their families, and he is absolutely right: that is critical. If we cannot get that right, nothing can happen. Palm oil is in short supply at the moment, so how can we better ensure that those who produce it get the price they want, and the rest of the world gets the supply it needs? We need to find a balance, so perhaps we need a working partnership.

[Kerry McCarthy]

That is probably the subject for another long debate, because it gets into the inequities in global food supply chains and making sure that farmers—whether in the hon. Gentleman’s constituency or the heart of the Indonesian rainforest—get fairly rewarded for what they do. I would say that a lot of products with palm oil in them are probably not the best elements of a healthy diet, such as the ultra-processed foods we should be stamping out. However, palm oil can be sustainable, and I will come on to talk about how we ensure that it is. Even if some palm oil products someone ends up consuming are not particularly great, there are others where palm oil is an important part of our food systems.

Indonesia is the world’s largest producer of palm oil, supplying more than half of global exports. Palm oil accounts for around 4.5% of GDP and supports 16 million jobs, with many of those involved being smallholders, as I said. This is a dilemma that many emerging economies face: going for growth, exploiting abundant natural resources to the max and boosting the livelihoods of people who might otherwise be living in poverty, or protecting their environment. However, I do not think those two things need to be at odds with each other.

It is true that palm oil has historically been linked to deforestation, peatland drainage and biodiversity loss, but Indonesia has been taking steps to address that. A mandatory national certification scheme for Indonesian sustainable palm oil, known as ISPO, was introduced in 2011. A palm oil moratorium was introduced in 2018, halting new plantation permits and revoking some non-compliant concessions, and many private sector companies have adopted NDPE, or “No Deforestation, No Peat, No Exploitation” policies.

Indonesia has also acted more widely to protect its forests and peatlands. Forest and peatland moratoriums were introduced in 2011 and made permanent in 2019. New permits to clear primary forests and peatlands were suspended, and that was complemented by peatland restoration programmes and stronger protection against wildfires. Secondary forests are still vulnerable, however, and many forests remain exposed within existing concessions.

Indonesia’s efforts are now focused on scaling up certification, strengthening enforcement and ensuring that future growth in palm oil production does not come at the expense of remaining forests, but this is a global issue, and we cannot expect Indonesia to act alone. We know that 90% of all global deforestation is driven by agricultural expansion to meet international demand for traded commodities. What we consume in this country is contributing to the destruction of forests and peatlands across the globe. The Government’s figures show that, in 2023, British consumption of everyday goods, such as palm oil, cocoa, rubber and soy, was linked to the clearing of around 29,000 hectares of forests worldwide. That is an area two and a half times the size of Manchester—we normally say the size of Wales, but perhaps Manchester is where it is at these days.

This was going to be the point at which I called out the Government for not making more progress with our legislation on forest risk commodities. I was going to say that we cannot have any credibility on the global stage in co-chairing initiatives such as the FACT—forest, agriculture and commodity trade—dialogue or the Forest and Climate Leaders’ Partnership, which we co-chair with Guyana, if we are not prepared to take steps to stamp out deforestation in our own supply chains.

During my time as Climate Minister, I spoke often to the Minister for Nature and the FCDO Minister responsible for international development, as well as to our two excellent envoys for climate and nature—Rachel Kyte and Ruth Davis—about this issue. I also pay tribute to the team in the international forest unit, which spans the Department for Energy Security and Net Zero and the FCDO, who were great to work with.

Our conversations went back and forth on the pros and cons of going down the EU route on regulation, which was focused on the concept of sustainability, or the route proposed by the previous UK Government under the Environment Act 2021, which was based on legality. There was a valid discussion to be had about which approach was best, complicated by the fact that the EU approach would apply in Northern Ireland.

What should not have been up for debate was whether we would act at all, yet some parts of Government were arguing that this represented another burden on business, which we could not impose. Businesses such as Ferrero, which I met, were calling for regulation, as were supermarkets. The opposition within Government was a straw man to argue for delay or, in fact, for dropping the proposal altogether.

As I said, I came here prepared to vent my frustration at the delay, but I was pleased to get a heads-up from the Nature Minister last night that the Government are announcing today, at London Climate Action Week, that they are moving ahead with the regulations. UK businesses that trade in internationally sourced commodities such as palm oil will be legally required to check that their supply chains are free from products linked to illegal land clearances and the destruction of the world’s rainforests.