Controversial timber estate ready for harvest<\/p>\n
By Sylvia Gratia M. Nirang<\/p>\n
SUBANJERIJI, South Sumatra (JP): After facing sharp criticism
\nfrom environmental bodies since the early stages of its
\ninception, PT Musi Hutan Persada (MHP) is now ready to harvest
\npart of its 193,500-hectare timber estate.<\/p>\n
Company general manager H. Agusnang said MHP would harvest 2.5
\nmillion cubic meters of wood from 10,000 hectares of its estate
\nin the middle of this year to supply a new plant owned by PT
\nTanjung Enim Lestari Pulp and Paper.<\/p>\n
He said the US$1 billion pulp plant, scheduled to start
\noperations in Aug. 1999, would need 2.5 million cubic meters of
\nwood for an initial production capacity of 450,000 tons of pulp
\nper year.<\/p>\n
\"This year, we will harvest about 10,000 hectares of our
\nAcacia mangium trees to supply the pulp plant,\" Agusnang said.<\/p>\n
The timber estate and the pulp plant are subsidiaries of
\nBarito Pacific Timber, a giant timber company controlled by
\ntimber tycoon Prajogo Pangestu.<\/p>\n
Barito Pacific owns 60 percent of MHP's shares, while 40
\npercent is controlled by state-owned timber estate PT Inhutani V.<\/p>\n
The government has granted the company a 296,400-hectare
\nconcession area for its timber estate in South Sumatra, but it is
\nonly able to develop 193,500 hectares, as the remaining land is
\neither owned by local residents or is designated as a
\nconservation area.<\/p>\n
Barito Pacific holds 51 percent of PT Tanjung Enim's shares,
\nwhile Sumatra Pulp Corporation controls 33 percent and PT Tridan
\nSatriaputra Indonesia owns the remaining 16 percent.<\/p>\n
PT Tridan Satriaputra is controlled by President Soeharto's
\neldest daughter Siti Hardiyanti Rukmana, while Sumatra Pulp
\nCorporation is a joint venture of Marubeni Corporation, Nippon
\nPaper Industries and Japan's Overseas Economic Corporation Fund.<\/p>\n
Agusnang said MHP had planted Acacia mangium trees on 160,000
\nhectares of its estate. The tree has been a raw material for the
\ncompany's pulp since the start of its plantation activities in
\n1990.<\/p>\n
He explained that after its initial production needs of 2.5
\nmillion cubic meters of Acacia mangium wood in its first year,
\nthe pulp plant would require 4.5 million cubic meters of raw
\nmaterial to meet a targeted production capacity of one million
\ntons of pulp per year starting in its second year.<\/p>\n
MHP will supply the raw material for the plant's second year
\nof production from 25,000 hectares of its timber estate.<\/p>\n
Agusnang said the pulp plant was originally scheduled to begin
\noperations in mid-1998 and that the delay has forced MHP to
\nreview its operational plans.<\/p>\n
\"We have sold premier seeds produced by our nursery in
\nSubanjeriji to other timber estates just to keep our cash flow
\nmoving. We also sell furniture wood such as sengon and sungkai,\"
\nhe said adding that the company has sold 500 tons of premier
\nseeds of trees per year since 1994 at an average price of Rp
\n350,000 per kilogram.<\/p>\n
He said the delay in the plant's operation was mostly due to
\ncriticism from environmental analysts on the development of the
\npulp plant and the timber estates.<\/p>\n
The Indonesian Forum for Environment (Walhi), for example, has
\nsaid the development of Tanjung Enim Lestari's plant would cause
\n\"massive social problems\".<\/p>\n
The company has \"seized the people's forests and farmland
\nwithout any prior consultation,\" said Walhi, a prominent non-
\ngovernmental organization.<\/p>\n
The pulp and paper mill, according to Walhi, will also benefit
\nfrom conservation forests in the area, thereby endangering forest
\nsustainability.<\/p>\n
The plant straddles two subdistricts, Gunung Megang and
\nRambang Dangku in Muara Enim regency, about 130 kilometers west
\nof South Sumatra's capital of Palembang.<\/p>\n
MHP's timber estate is 25 kilometers south of the pulp plant
\nand is in the regencies of Ogan Komering Ulu (OKU), Muara Enim,
\nMusi Banyuasin, Lahat and Musi Rawas.<\/p>\n
The company divides its concession into three sections. The
\nfirst, Martapura, covers 10,350 hectares of forest in OKU
\nregency. The second, Subanjeriji, covers 87,354 hectares of
\nforest in Muara Enim, while Benakat, the third, covers 198,741
\nhectares of forests in Lahat, Musi Banyuasin and Musi Rawas
\nregencies.<\/p>\n
Walhi also has said it has discovered that MHP, in order to
\nestablish its timber estate, appropriated its land from local
\npeople at extremely low prices.<\/p>\n
According to Walhi's site surveys in 1995, MHP designated
\nextremely low-density forest areas for its conservation sites
\nwhile selecting high-density forest areas for its timber
\noperations.<\/p>\n
Agusnang said there was no problem because MHP only used
\n193,500 hectares of its 296,400-hectare concession for timber
\ndevelopment.<\/p>\n
The company also maintains 86,450 hectares of lowland tropical
\nforest in its concession as a conservation area while the rest of
\nits concession is jointly managed with local villagers, who plant
\nrubber trees and seasonal crops, he said.<\/p>\n
\"All the problems have been carefully taken care of, but it is
\nimpossible to satisfy everyone,\" Agusnang said.<\/p>\n
He said MHP also planned to build a chip wood mill and a
\nmedium density fiberboard (MDF) plant because MDF was deemed to
\nbe a growing industry.<\/p>\n
He said the MDF plant would be built solely by his company and
\nit was expected to produce 240,000 tons of MDF per year.<\/p>\n
The raw material for the MDF plant is to come from surplus
\nsupplies designated to Tanjung Enim's pulp plant.<\/p>\n
He said the prospects for the MDF industry were good because
\nmarket demand was increasing and raw materials in the country
\nwere abundant.<\/p>\n
He also said MHP was ready to join the ecolabeling assessment
\nprocess conducted by the Indonesia Ecolabeling Foundation this
\nyear in anticipation of the global trade era.<\/p>",
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"sponsor": "Okusi Associates",
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