Government sets standard selling prices for timber<\/p>\n
JAKARTA (JP): The government has set standard selling prices
\nof various forest products destined for export as the basis for
\ncalculating the resource royalty provision.<\/p>\n
The industry and trade minister said in a decree dated June 8
\nobtained by the media yesterday that the standard selling prices
\nof timber were calculated by averaging prices on the
\ninternational and domestic markets.<\/p>\n
The new decree also stated that the calculation of the wood
\nstandard prices depended on the type of products and their
\norigin.<\/p>\n
The standard price for big-diameter logs, such as meranti from
\nSumatra, Kalimantan, Sulawesi, and Maluku, is US$59 per cubic
\nmeter.<\/p>\n
Mixed jungle wood with a diameter of more than 30 centimeters
\nis $35 per cubic meter.<\/p>\n
Wood from industrial forests have also different standard
\nprices: $7 per ton for pine, $5 per ton for acacia, $3 per ton
\nfor balsa, $5 per ton for eucalyptus and $3 for sengon.<\/p>\n
The government also imposes various standard prices on fancy
\nwoods, such as teak, ebony and sandalwood.<\/p>\n
The standard price for teak is $67 per cubic meter, ebony $574
\nper ton and sandalwood $676 per ton.<\/p>\n
All those woods' standard prices will be effective until Dec.
\n31, 1998.<\/p>\n
The decree stated those standard prices would be adjusted
\nperiodically to accommodate fluctuations in market prices.<\/p>\n
Titus Sarijanto, an expert at the Ministry of Forestry and
\nPlantations, said yesterday that the official standard selling
\nprices were too high compared to the current prices of logs on
\nthe international and domestic markets, making it hard for timber
\ncompanies to export their products.<\/p>\n
Meranti logs, for instance, were sold at $125 per cubic meter
\ninternationally and Rp 250,000 at home, Titus said.<\/p>\n
Last month, the government introduced resource royalty
\nprovisions, or rent taxes, on the country's timber companies to
\nreplace mandatory forest royalties, as required by the
\nInternational Monetary Fund (IMF) in exchange for a US$43 billion
\nbailout package.<\/p>\n
The imposition of the resource rent taxes aims to protect the
\nenvironment and eliminate the bias against production for
\nexports.<\/p>\n
According to Government Regulation No. 59\/1998, dated May 5,
\nforest concessionaires are liable to pay rent taxes, ranging from
\nzero to 6 percent of timber sales.<\/p>\n
Concessions<\/p>\n
Meanwhile, the director general of forest utilization at the
\nMinistry of Forestry and Plantations, Harnanto HM, said yesterday
\nthat the government would work with the IMF to set a new date for
\nthe auction of forest concessions and design the best bidding
\nmechanism possible to prevent the concentration of ownership in a
\nhandful of big timber companies.<\/p>\n
Harnanto said the government would grant no new forest
\nconcessions in order to prevent further deterioration of the
\ncountry's forests.<\/p>\n
Therefore, new logging contracts would be limited to areas
\nwhose concessions had been revoked by the government.<\/p>\n
The auctioning of forest concessions is stipulated in the
\nSupplementary Memorandum on Economics and Financial Policies
\nsigned by the government and the IMF last April.<\/p>\n
Under the memorandum, Indonesia is supposed to introduce the
\nauction system by the end of this month.<\/p>\n
The memorandum said adopting an open bidding system to appoint
\nforest concessionaires would help ensure transparency in the
\nmanagement of the country's forest resources.<\/p>\n
Under former president Soeharto's administration, the
\ngovernment awarded forest concessions to certain companies and
\nindividuals, mostly Soeharto's cronies, without open tender,
\nwhich had according to some analysts led to the destruction of
\nforests. (gis)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/government-sets-standard-selling-prices-for-timber-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}