Reforestation fund management to be revised<\/p>\n
JAKARTA (JP): The government will improve the management of
\nits reforestation fund to ensure transparent fund collection and
\ndisbursement, Minister of Forestry and Plantations Nur Mahmudi
\nIsmail said on Thursday.<\/p>\n
Responding to results of an audit on the fund by independent
\nauditor Ernst & Young, Nur Mahmudi acknowledged that there had
\nbeen leakages and inefficiencies in management of the fund.<\/p>\n
\"We will improve fund management to help create an open
\nadministration system so that the fund is used and collected
\nproperly,\" he told reporters.<\/p>\n
According to the audit result, the government lost US$5.25
\nbillion due to inefficiency in collection and utilization of the
\nfund over the past five years ending in March 1998.<\/p>\n
To maximize fund collection, Nur Mahmudi said his office would
\nend the existing system of self-assessment and self-reporting by
\nconcession holders, which he said did not have a proper control
\nmechanism.<\/p>\n
The government, he said, would implement the old system of
\nemploying government officials to calculate the amount of
\nreforestation funds forestry firms have to pay to the government.<\/p>\n
The government will also force delinquent companies to pay
\nreforestation funds owing, he said.<\/p>\n
\"We will send three consecutive warning notices to the
\ncompanies in order to collect those funds. If they ignore them,
\nwe will revoke their forest concessions,\" he said.<\/p>\n
Reforestation funds are collected by the government from
\ncompanies for every log cut in their concession areas to ensure
\nsustainable forest management during their activities.<\/p>\n
In a bid to improve management in the utilization of the fund,
\nNur Mahmudi said his office would strictly limit the use of funds
\nfor reforestation, and would no longer allow money from the
\nreforestation fund to be used for other purposes.<\/p>\n
In the past, under the Soeharto administration, reforestation
\nfunds were sometimes used as a cash source for various
\npolitically well-connected companies such as PT Kiani Kertas or
\nactivities funded by well-connected people such as the consortium
\nwhich underwrote the last Sea Games.<\/p>\n
Nevertheless, Nur Mahmudi said the government would not in the
\nnear future use the remaining funds, currently standing at Rp 4.1
\ntrillion (US$585 million).<\/p>\n
In addition, Nur Mahmudi said he would follow up on all
\nsuggestions presented in Ernst & Young's audit report.<\/p>\n
Ernst & Young suggested in its report that the Ministry of
\nForestry and Plantations collect all money from the reforestation
\nfund lent to various parties.<\/p>\n
It also suggested that the ministry monitor both interisland
\nand export movement of logs and maintain the balance between
\nsupply and demand of logs.<\/p>\n
The ministry should also develop a reliable information and
\naccounting system to ensure that all credits and debits of the
\nfunds are documented properly.<\/p>\n
In the longer term, the government should introduce tax
\nincentives to encourage more investment in the forestry sector.<\/p>\n
The government also has been advised to establish a real
\nestate investment trust to help small companies and community
\norganizations to participate in sound forest management. (06)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/reforestation-fund-management-to-be-revised-1447893297",
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"sponsor": "Okusi Associates",
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