Govt threatens to revoke permits of defiant firms<\/p>\n
JAKARTA (JP): Minister of Forestry and Plantations Muslimin
\nNasution warned on Monday 33 timber companies would lose their
\nlicences if they failed to pay overdue fees by March 1, with the
\ngovernment introducing new rules to bring delinquent firms into
\nline.<\/p>\n
Muslimin said timber companies were given a two-month deadline
\nfrom January to settle their reforestation fee and forest royalty
\ndebts, but there had been no response.<\/p>\n
\"Those timber companies have been given a warning and a 2
\npercent fine per month has been imposed on them since January. If
\nthey fail to pay their debts before March 1, their logging
\ncontracts will be revoked,\" he said at a session with the House
\nof Representatives' Commission III.<\/p>\n
The commission deals with forestry, plantations, agriculture
\nand food affairs.<\/p>\n
Director General of Utilization of Production Forests Waskito
\nSoerjodibroto said unpaid reforestation fees reached more than Rp
\n116.2 billion (US$13.7 million) and unpaid forest royalties stood
\nat Rp 59.1 billion as of December last year.<\/p>\n
Waskito said some of the negligent timber companies were owned
\nby giant timber groups. He refused to name them, saying that the
\ngovernment would reveal their identities after March 1.<\/p>\n
He divulged that the biggest debtors for forest royalties were
\ntimber companies operating in East Kalimantan, with the major
\ndebtors for reforestation fees in South Sulawesi, Maluku and
\nIrian Jaya.<\/p>\n
Reforestation fees and forest royalties are mandatory fees
\nimposed by the government on forest concessionaires to ensure
\nforests are managed in an environmentally sustainable manner. The
\nsize of the fee depends on the volume and type of timber felled.<\/p>\n
Since last April 1, the government has accounted for
\nreforestation funds collected from timber companies as nontax
\nreceipts in the state budget. Previously, the funds were
\ntransferred to the forestry ministry's bank account and its
\nallocation was governed by presidential decree.<\/p>\n
Muslimin said timber companies would be required to make a
\nfinancial deposit to guarantee on-time payment of the
\nreforestation fund and other forestry levies in the future.<\/p>\n
He also said timber companies would be obliged to pay the
\nreforestation fund in advance, not after they sold their logs or
\nwood products.<\/p>\n
\"The old payment system has resulted in a huge amount of
\nunpaid funds.\"<\/p>\n
Muslimin also said international auditors would be hired to
\nexamine the use of reforestation funds and forest royalties to
\ntrack possible misuse.<\/p>\n
Auditing of the reforestation funds by independent
\ninternational auditors is stipulated in the Supplementary
\nMemorandum on Economic and Financial Policies, a reform package
\nagreed to by the government with the International Monetary Fund
\n(IMF) in exchange for emergency funds of US$49 billion.<\/p>\n
\"The World Bank will finance the auditing, including providing
\nthe money used to pay the international auditors. I will meet
\nthe World Bank officials tomorrow (Tuesday) and we will choose
\nthe auditors.\"<\/p>\n
He said his preferred auditors would be Price Waterhouse or
\nArthur Andersen because Price Waterhouse was currently auditing
\nthe Association of Indonesian Wood Panel Producers (Apkindo),
\nwhile Arthur Andersen was auditing the Association of Indonesian
\nForest Concessionaires (APHI).<\/p>\n
\"The auditing process is expected to be completed in June,\" he
\nsaid.<\/p>\n
The IMF targeted the reforestation fund because much of the
\nmoney, instead of being used to finance the country's
\nreforestation projects, was rerouted to other project, such as
\nfinancing the national passenger jet project, a huge peatland
\nproject and the 1997 Southeast Asian Games in Jakarta.<\/p>\n
Muslimin said his ministry expected to collect Rp 1.05
\ntrillion in reforestation funds in the 1999\/2000 fiscal year,
\nstarting April, a 7 percent decline from Rp 1.13 trillion in the
\nprevious year. (gis)<\/p>",
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