Logs scarcity may cut into RI's wood exports<\/p>\n
By Sylvia Gratia M. Nirang<\/p>\n
JAKARTA (JP): Dwindling timber supplies, demands for greater
\nenvironmental responsibility, and sluggish demand are likely to
\nhamper any growth in the country's timber and forest-related
\nexports this year.<\/p>\n
The government has predicted that foreign exchange earnings
\nfrom the export of timber and other forest products will decline
\nthis year due to a poor supply of timber.<\/p>\n
Director-general of the Utilization of Production Forests
\nWaskito Soerjodibroto said the drop in timber production and the
\nsluggish sales of Indonesian wood products in several main
\ndestinations, such as Japan and South Korea, led to the lower
\nexport earnings from wood and other forest products in 1998.<\/p>\n
He estimated that earnings from wood and wood related product
\nexports would fall below US$7.5 billion for 1998\/1999, lower than
\nthe government's initial target of $8 billion for the fiscal
\nyear.<\/p>\n
\"We predict that foreign exchange earnings from wood and
\nforest products will continue to drop next fiscal year because
\ntimber production is expected to drop by a further 50 percent
\nfrom a normal supply of over 24 million cubic meters (as in
\n1997), \" he told The Jakarta Post.<\/p>\n
In 1997, Indonesia's exports of wood and wood products brought
\nin $7.55 million in foreign exchange revenue.<\/p>\n
Waskito said the country's timber production dropped by 32
\npercent, to 12 million cubic meters, during the period from
\nJanuary 1998 to October 1998, compared to 17.6 million cubic
\nmeters in the same period of 1997.<\/p>\n
Log supply<\/p>\n
The Indonesian Forestry Society (MPI) initially estimated that
\nIndonesia's timber supply might decline again by as much as 25
\npercent in 1999, due to a drop in logging activity and the heavy
\nwet season.<\/p>\n
MPI chairman Sudradjat DP said the low timber production would
\nlikely continue until the middle of 1999.<\/p>\n
\"The sharp drop in timber supply has been primarily caused by
\nthe heavy rains, which are expected to continue until March. This
\nhas disrupted logging activities and the transportation of timber
\nto the mills,\" he said.<\/p>\n
Sudradjat added that logging activities would also be affected
\nby political events in the country, especially during the run-up
\nto the general election planned for June.<\/p>\n
\"Many timber companies will stop their activities during this
\nperiod,\" he said.<\/p>\n
That would force wood processing industries to continue to
\nwork well below capacity.<\/p>\n
Wood processing industries are currently operating at 30
\npercent to 40 percent of total production capacity due to the
\nscarcity of timber, he said.<\/p>\n
\"Because of this timber scarcity, wood-related industries are
\nalso rejecting big orders from overseas,\" he said.<\/p>\n
Domestic wood processing industries have a total capacity of
\nabout 36 million cubic meters of timber a year. Of this, 12.6
\nmillion cubic meters is used by the sawmill and woodworking
\nindustry, 18.5 million cubic meters by plywood manufacturers,
\n4.64 million cubic meters by pulp and paper manufacturers, and
\n430,000 cubic meters by the furniture industry.<\/p>\n
Minister of Forestry and Plantations Muslimin Nasution said he
\nexpected the country's wood processing industries would have to
\nface a timber shortage for the next five years. He predicted that
\nby that time the supply of timber would reach about 31 million
\ncubic meters per year.<\/p>\n
Muslimin blamed the Ministry of Industry and Trade and the
\nInvestment Coordinating Board (BKPM) for the current scarcity of
\ntimber and the idleness of most wood processing firms.<\/p>\n
\"BKPM and the Ministry of Industry and Trade issued permits
\nfor new wood processing plants without referring to us about the
\ntimber supply,\" Muslimin said.<\/p>\n
\"That policy has resulted in timber shortages. And this
\nsituation encourages theft and illegal trade.\"<\/p>\n
The timber industry has been under the supervision by the
\nMinistry of Industry and Trade since 1986.<\/p>\n
To address the shortage, Muslimin said the government would
\ncut its timber export quota for the next fiscal year.<\/p>\n
The government set a timber export quota of 5 million cubic
\nmeters for 1998\/1999, as part of the International Monetary
\nFund's economic reform program.<\/p>\n
The freeing up of timber exports was mandated by an agreement
\nwith the IMF, despite the fact that most of the country's wood
\nprocessing industries are currently operating below capacity.<\/p>\n
As part of the agreement, the government has also cut the
\nexport tax on timber to 30 percent, from the previous 200
\npercent.<\/p>\n
Despite the drastic cut to the timber export tax, most
\ncompanies are still reluctant to export their timber, as local
\nsales are now more profitable due to domestic timber scarcity.<\/p>\n
The government has issued timber export licenses to 20 of the
\n43 companies which applied for them. The 20 companies were each
\nlicensed to export 460,000 cubic meters of timber.<\/p>\n
\"But so far less than 20,000 cubic meters of timber has been
\nexported. How can we export if there is not enough supply?\"
\nSudradjat said.<\/p>\n
To increase the country's timber production, Waskito said the
\ngovernment would cut the existing protracted bureaucracy
\nprocedures.<\/p>\n
He said the government would also increase or even abolish
\nlogging quotas for timber companies.<\/p>\n
The quota was imposed as a penalty on errant timber companies.
\nIts other aim is to reduce the destruction of forests and the
\nenvironment.<\/p>\n
Ecolabeling<\/p>\n
Aside from the dwindling timber supplies, local forest-related
\ncompanies are also facing pressure from major buyer countries to
\nincrease their environmental responsibility.<\/p>\n
They demand that the wood they buy has an ecolabel, that is,
\ncertification to show that the timber is felled and the wood
\nproducts are processed in an environmentally sustainable manner.<\/p>\n
The United States and some companies in Europe require wood
\nthey import to have ecolabel certification.<\/p>\n
Waskito also said that other timber producing countries,
\nincluding Malaysia, have issued their own ecolabel certificates,
\nadding pressure on Indonesia's industry to do the same.<\/p>\n
Malaysia has issued forest certificates similar to ecolabel
\ncertificates, called 'Sustainable Forests of Malaysia', although
\nmuch of the timber processed in the country is reportedly
\nsmuggled from Indonesia.<\/p>\n
\"International buyers choose to buy Malaysian plywood because
\nit has been certificated, although they admitted that Indonesian
\nplywood is the best in terms of quality, and also cheaper,\"
\nWaskito said.<\/p>\n
The International Tropical Timber Organization (ITTO), which
\nincludes timber consuming and producing countries, says
\necolabeling will become a prerequisite for tropical timber
\nproducers to gain access to international markets after 2000.<\/p>\n
At least 19 countries now have ecolabel requirements,
\nincluding some members of the European Union, Canada, Japan, the
\nScandinavian countries, the United States, New Zealand,
\nAustralia, India, South Korea, Singapore, Croatia, Taiwan and
\nIsrael.<\/p>\n
The Indonesian Ecolabeling Agency (LEI), an independent body
\nestablished in 1996 to promote sustainable forest management by
\nassessing Indonesian timber companies' operations, said last year
\nthat it would audit the operations of at least 16 timber
\ncompanies to see if they could be certified.<\/p>\n
The ecolabeling audits would take place on a voluntary basis.<\/p>\n
If companies meet the criteria of the Sustainable Forest
\nManagement Certification System they are awarded the local
\necolabel certificate known as SNI 5000.<\/p>\n
\"Although ecolabeling is not compulsory for forest
\nconcessionaires, they may not be able to access some foreign
\nmarkets without this certification,\" Waskito said.<\/p>\n
Waskito added that only 26 of the 70 forest concessionaires
\nassessed by LEI in 1996 were considered \"adequately prepared\" to
\nmeet ecolabeling requirements while none were considered \"fully
\nprepared\".<\/p>\n
But the current economic conditions have discouraged timber
\ncompanies from applying for the ecolabel certification.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/logs-scarcity-may-cut-into-ris-wood-exports-1447893297",
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