(Corrects conversion of 70,000 hectares in third paragraph to 172,973 acres, not 1.73 mln acres)
By Agustinus Beo Da Costa and Fathin Ungku
JAKARTA (Reuters) - An Indonesian court on Tuesday rejected a bid by two companies to reinstate permits for palm oil plantations in its easternmost region of Papua, in what was seen as a test of the government's pledge to halt such land conversions to contain deforestation.
The verdict comes two months after Indonesia said it would not approve new palm oil permits even after the lapse of a moratorium on plantations.
PT Papua Lestari Abadi (PLA) and PT Sorong Agro Sawitindo (SAS) had permits for about 70,000 hectares (172,973 acres) of land, equivalent to nearly seven times the size of the city of Paris.
The firms had sued the head of the Sorong district in West Papua overseeing their permits, arguing that revoking them had harmed the companies.
The Sorong district head revoked permits covering 105,000 hectares held by PLA, SAS and another company PT. Inti Kebun Lestari, which is also fighting the decision in court.
The court rejected "in its entirety the plaintiff's claim," Petrus P. Ell, a lawyer defending the head of Sorong district, told a virtual conference after the verdict.
The companies' lawyer, Juhari, who uses one name, said they would appeal the verdict.
Indonesia last month joined 127 other nations pledging an end to deforestation by 2030, but just days later appeared to back track, saying that a zero-deforestation goal was at odds with development interests.
Instead, Indonesia promised a "carbon net sink" goal for its forestry sector by 2030, meaning that the sector will absorb more greenhouse gas emissions than it emits.
The about-face by a country seen as critical to saving tropical rainforests triggered criticism by environmentalists, but Greenpeace Indonesia welcomed Tuesday's court verdict.
"We hope this will be encouraging for other districts and provinces," campaigner Nico Wamafma said in a statement.
Indonesia, home to the world's third-largest tropical forests and a top producer of palm oil, has banned forest clearing since 2011.
The country's environment ministry claims to have reduced the rate of deforestation by 75% last year by controlling forest fires and curbing land clearing.
(The story has been refiled to correct the conversion of 70,000 hectares in third paragraph to 172,973 acres, not 1.73 mln acres)
(Reporting by Agustinus Beo Da Costa; Writing by Fathin Ungku; Editing by Ed Davies)