Environmental groups have criticized the World Bank for a forest management plan in Indonesia that they say will destroy farming communities, threaten endangered forests, and fuel conflicts in rural areas. As Chad Bouchard reports from Jakarta, World Bank officials say the plan will lead to a sustainable logging industry.

Environmentalists lashed out at the World Bank for endorsing Indonesia's plan to establish five million hectares of new timber plantations over the next three years.

World Bank officials said in a report this week that the forestry initiative would create jobs and preserve endangered tropical forests.

But Farah Sofa, campaign director for Indonesia's largest environmental group, WALHI, says vast plantations in Sumatra and Borneo would erode biodiversity, pollute the soil, and displace people who depend on the forest for their livelihood. Sofa says similar plans supported by the World Bank from 1985 to 2004 resulted in a surplus of supply and an increase in corruption.

"So I think if at that time it doesn't work, I don't see why it'll work now," said Sofa. "Actually the industrial plantation doesn't create enough jobs. In fact, it makes more people lose their livelihoods. And those who lose their livelihoods are those who depend on forest resources."

Sofa adds that timber plantations have created communal conflicts over land rights, and led the Indonesian military to intervene on behalf of companies.

The World Bank's top official in Indonesia, Andrew Steer, says a sustainable logging industry is the key to creating jobs and preserving tropical forests in the country. He says the plan aims to rehabilitate part of the 25 million hectares of wasted land in the country, an area about the size of the United Kingdom, and curb illegal logging.

"We share the view of WALHI that there'd need to be a lot of environmental and social sort of concerns taken into account, and we think that can happen," said Steer. "But we strongly disagree with the view that wasteland should be left waste simply because we're afraid of risks. I mean we believe that it is urgent to address poverty in this country."

Conservationists say at least 40 percent of Indonesia's tropical forest has been cut over the past 50 years, and at the current rate of consumption the remaining lowland trees will disappear by 2010.

At Indonesia's request, the World Bank drafted a forestry plan in June 2006. This week's report updated the strategic outline, but the World Bank will not fund implementation of the plan.