Hidden colony of orang-utans is discovered in the forests of Borneo

Conservationists working to combat deforestation on the island of Borneo have uncovered a "hidden colony" of 800 orang-utans in an area under imminent threat from the expansion of the palm oil industry.

The previously uncounted apes have been found in the Sungai Putri, a tract of rare peat swamp forest in the West Kalimantan province of Indonesian Borneo. But the area has recently been rezoned by local government and concessions for palm oil plantations could be sold at any time.

Frank Momberg, country director of the conservation group Flora and Fauna international, is part of a group of scientists and environmentalists who were studying the massive carbon deposits in the area when they came upon the colony. "Local people knew of course [that they were there]," he said. "But no scientist had ... recorded this population before."

Mr Momberg is leading an urgent effort to protect the 57,000-acre forest and guarantee a future for the orang-utans and other endangered species in Sungai Putri, as well as the millions of tons of carbon it secures.

Borneo is divided between Indonesia, Malaysia and Brunei, and is at the epicentre of deforestation worldwide. Half of all tropical timber used on the planet comes from this one island. Peat swamp forests like Sungai Putri are among the most important carbon sinks on the planet, yet vast areas of them have been drained in recent years for conversion to agricultural land, releasing millions of tons of CO2 into the atmosphere.

The swampy floor of Sungai Putri, thick with decaying trees and rich organic matter up to 11m deep in places, is not only a dense, deep carbon sink, says Mr Momberg, but the "most efficient terrestrial ecosystem for the sequestration of carbon".

Deforestation accounts for one-fifth of all carbon released into the atmosphere and Indonesia's slash and burn policies have already seen the country become the third-largest emitter of greenhouse gases.

It has also meant massive habitat loss for Asia's only great ape. The orang-utan could be the first great ape to be made extinct. The "man of the forest" used to be common throughout Asia but now survives only on the islands of Borneo and Sumatra. There are some 7,000 Sumatran orang-utans left and the estimated population of 40,000 remaining on Borneo is also in steep decline.

Delegates at the climate talks in Bali will be asked to radically expand the Kyoto Protocol which would see countries like Indonesia rewarded for avoiding further deforestation.

If the proposals, backed by scientists, environmentalists, developing nations and a growing business lobby, can be agreed, areas such as Sungai Putri could be worth millions of dollars and play a key role in combating climate change.

But the quick returns offered from palm oil mean the threat to the forest remains real and 70 per cent of Sungai Putri could be wiped out within five years.

"Farmers use fire to clear the land and fires are already burning at the edges," said Mr Momberg. "Illegal logging is ongoing with small scale but continuous degradation of the forest."

Help may be at hand from a new kind of conservation effort. A green investment company, Carbon Conservation, has been working with local communities, Flora and Fauna International and local government to bring in outside funding. They are setting up a scheme under which private-sector investors put in money which is used both to protect the forest and offer alternative incomes to local people. In return investors get carbon credits for the area which has avoided deforestation.

At the moment the market for the voluntary credits is small but that could change overnight if the UN talks deliver an international framework deal.

Dorjee Sun, the chief executive of Carbon Conservation, said that negotiations were well advanced. A leading investment bank and others were just waiting for a signal from Bali.

"The private sector is showing the way by buying voluntary credits, now it's over to the governments in Bali," he said. "It's time for them to just do it."